AFE Quiz 17: Expenses – Accounting for Everyone

Which of the following best defines an expense?

A decrease in owner’s equity from the cost of operating the business
An increase in assets
An owner’s withdrawal
A liability

On which financial statement are expenses primarily reported?

Balance Sheet
Income Statement
Statement of Owner’s Equity
Statement of Cash Flows

Which of the following is NOT an expense?

Rent Expense
Wages Expense
Utilities Expense
Service Revenue

What is the normal balance of an expense account?

Debit
Credit
Debit and Credit
None of the above

Which of the following transactions would increase expenses?

Paying employee salaries
Borrowing money from a bank
Receiving cash from a customer
Owner investment

Which of the following is a typical example of an operating expense?

Utilities Expense
Notes Payable
Accounts Receivable
Unearned Revenue

Which of the following would NOT be classified as an expense?

Depreciation Expense
Supplies Expense
Cash
Insurance Expense

What is the effect of recording an expense?

Decreases equity
Increases equity
Increases assets
Decreases liabilities

Which of the following is a contra-expense account?

Purchase Returns and Allowances
Utilities Expense
Rent Expense
Supplies Expense

Which of the following best describes accrued expenses?

Expenses paid in advance
Expenses that have been incurred but not yet paid
Expenses that have been paid and recorded
Expenses that are never paid