Exam (elaborations)
ALEKS Accounting Questions and Answers
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Exam of 4 pages for the course ALEKS at ALEKS (ALEKS Accounting)
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ALEKS AccountingAccounts that normally have a credit (Cr.) balance - answer Liabilities, Revenues, and
Equity.
Revenue - answerIncome generated through providing services or products to
customers. When revenue is generated, a revenue account is increased.
Rev. accounts for businesses providing Services: Revenue
Rev. accounts for businesses selling Products: Sales
Rev. increases Net Income, which in turn increases Stockholders' Equity.
Expenses - answerRecorded when items are used to operate the business.
The value of assets used up or services consumed in the process of producing goods
and services to generate revenues.
Examples: Utilities Expense, Rent Expense, Insurance Expense, and Wages Expense.
Expenses decrease Net Income, which in turn decreases Stockholders' Equity.
Other Changes to Stockholders' Equity (Other than Exp. and Rev.) - answerIssuance of
Stock and Dividends.
Issuance of Stock - answerWhen the company sells additional stock.
The Capital Stock account is a stockholders' equity account used to accumulate
investments by stockholders.
An issuance of stock increases stockholders' equity but is not a revenue or expense
account.
Dividends - answerPayments of cash to stockholders as a sharing of profits.
The Dividends account is a temporary stockholders' equity account used to accumulate
the amount of cash paid to the stockholders.
A dividend decreases stockholders' equity but is not a revenue or expense account.
Items that do not cause changes to stockholders' equity - answerAssets and Liabilities
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