SW 1

A cash payment is recorded on the cash account as a = Credit

A company that sprays chemicals in residences to eliminate or prevent infestation of insects

requires that customers prepay for 3 months' service at the beginning of each new quarter.
Select the term that appropriately describes this situation from the viewpoint of the
exterminating company. = Prepaid Expense

A debit may signify a(n) = Decrease in Liability Accounts

A debit to an asset account indicates = An Increase in the Asset

A written promise to pay a definite sum of money on a specific future date is a(n): = Notes
Payable

Accounts payable and notes payable are: = Liabilities

Accumulated depreciation is: = All the depreciation expense taken on an asset, to date

After a business transaction has been analyzed and entered in the book of original entry, the
next step in the recording process is to transfer the information to = Ledger Accounts

The following accounts are standard components of stockholders' equity: = Expenses,

Revenues, Dividends

The following are characteristics of management accounting: = Reports are used primarily by
insiders rather than by persons outside of the business entity; Information may be
tailored to assist in specific managerial decisions, its purpose is to assist managers in
planning and controlling business operations

The following are services offered by public accountants: =

Consulting (correct answer)

Tax planning, Budgeting, Auditing

The following are true statements about the Accumulated Depreciation account: =

A contra asset acc with normal credit balance (correct answer)

A contra asset acc with normal debit balance; Shows the sum of all depreciation expense
from using the asset; Always has a normal balance opposite that of its companion
account

An example of a current liability is: = Unearned revenue

An example of an external decision maker is a(n): = Stockholder

An example of an external event: =

Depreciating an Equipment

Paying employees’ salaries, purchasing equipment, collecting a receivable

Capital stock represents: = The amount invested in the business by stockholders when
shares of stock were initially issued by a corporation

Cost of goods sold is: = An expense account

Credits are = Always on the right side

Depreciation Expense and Accumulated Depreciation are classified, respectively, as = Contra

asset, expense

Depreciation Expense would be found on =

Balance sheet (correct answer)

Income statement