Choose the letter corresponding to the correct answer for each of the questions provided below. 1. Accounts receivable or the amount to be received when a customer orders on account is an example of what account? a. Asset c. Equity b. Liability d. All of the above
Directions: Choose the letter corresponding to the correct answer for each of the questions
provided below.
1. Accounts receivable or the amount to be received when a customer orders on account
is an example of what account?
a. Asset c. Equity
b. Liability d. All of the above
2. Expenses incurred on paying utilities belong to what type of account?
a. Asset c. Equity
b. Liability d. All of the above
3. If Company A borrows money from company B, the transaction results to
a. Increase in asset of A and increase in asset in B
b. Increase in asset of A and decrease in equity of B
c. Increase in asset of A and no effect on assets of B
d. Both B and C
4. Equity means assets minus liabilities. Other terms that can be used synonymously with
equity are the following except :
a. Capital c. Net worth
b. Net assets d. Profit
5. Sources of legal obligation are the following except
a. The law c. Debts
b. Contracts d. Other operation by law
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