Chapter 5.1 Expanding The Ledger

Question 1

Revenues

Answer 1

related to the sale of goods and services

Question 2

Expenses

Answer 2

The costs related to the revenues

Question 3

Drawings

Answer 3

Owner’s withdraws for personal use

Question 4

4 types of accounts in the equity

Answer 4

Capital, Revenue, Expenses, Drawings

Question 5

Capital

Answer 5

This account will now contain only the equity figure of the fiscal period + new capital from the owner

Question 6

Revenue

Answer 6

Increases in equity resulting from the sale of goods and services ( normally a credit balance )

Question 7

Expenses

Answer 7

Decreases in equity resulting from the costs of the materials or services used to produce the revenue ( normally debit balance)

Question 8

Drawings

Answer 8

Decreases in equity resulting from the owner’s personal withdraws (typically debit balance)

Question 9

Income Statement

Answer 9

The income statement is a financial report that shows the revenue of a business, subtracts its expenses, and reveals the profit made for a given theme of time

Question 10

Revenue Account

Answer 10

Revenue is an increase in equity resulting from the sale of goods

Question 11

What is the revenue?

Answer 11

Revenue debited

Question 12

Revenue represents

Answer 12

an increase in equity

Question 13

An increase in equity

Answer 13

is a credit entry

Question 14

Bankers

Question 15

By Investors

Answer 15

In

Question 16

Income tax authorities

Question 17

Drawings