2025 ACC/290T Test Questions with Solved Solutions.

Burton Company purchased goods for resale. Burton Company paid some cash for the purchase and the remainder was put on the company's credit accounts with its suppliers. What is the effect of this transaction on the accounting equation? - Answer Inventory UP, Cash DOWN, Accounts Payable UP Dridge Company sold inventory for cash. The selling price was more than the original cost of the inventory. What is the effect of this transaction on the accounting equation? - Answer Cash UP, Inventory Down, Retained Earning UP Lyman Company paid cash for employee wages. What is the effect of this transaction on the accounting equation? - Answer Ogden Company purchased a building. Ogden paid part of the purchase price in cash and signed a note payable agreeing to pay the remainder in the future. What is the effect of this transaction on the accounting equation? - Answer Cash DOWN, Building UP, Note Payable UP Layton Company borrowed cash from a local bank. What is the effect of this transaction on the accounting equation? - Answer What is the proper way to record an increase in an asset account and an increase in an equity account? - Answer Asset, debit; equity, credit How are revenues typically recorded with debits and credits? - Answer Why are dividends recorded with debits? - Answer What is the proper way to record a decrease in an asset account and a decrease in a liability account? - Answer How are expenses typically recorded with debits and credits? - Answer What is a general ledger? - Answer A collection of accounts