Posted: July 19th, 2016

What are the most essential cards?

5. If total liabilities increased by $5,000, then

assets must have decreased by $5,000.

stockholders’ equity must have increased by $5,000.

assets must have increased by $5,000, or stockholders’ equity must have decreased by $5,000.

assets and stockholders’ equity each increased by $2,500.

6. Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies:

remaining.

purchased.

used.

either used or remaining.

7. At March 1, I. Repo Inc. reported a balance in Supplies of $200. During March, the company purchased supplies for $950 and consumed supplies of $800. If no adjusting entry is made for supplies:

stockholders’ equity will be overstated by $800.

expenses will be understated by $950.

assets will be understated by $350.

net income will be understated by $800.

8. The general term employed to indicate an expense that has not been paid or revenue that has not been received and has not yet been recognized in the accounts is:

contra asset.

prepayment.

asset.

accrued.