Accounting question???

which is the right answer?


Revenues would from:


A. initial investment of cast by owner


or


B. interest earned on business bank account


.........................................


a credit to a liability account: (which one?)


A. indicates an increase in the amount owed to creditors


B. indicates a decrease in the amount owed to creditors


C. must be accompanied by a debit to an asset account

Accounting question???
The first answer is B. If you've earned the interest, then it's definitely considered revenue. (If you haven't earned it yet, it's unearned revenue, which is actually a liability.) And initial investment of cash is an increase in owner's equity, not revenue.





The second answer is A. Anytime you owe someone money, it's an increase to liability. Only later, when you pay that debt, you debit liability, which is a decrease liability (but also a decrease in cash). And you can certainly credit a liability without a debit to an asset, such as when a company declares dividends.
Reply:I'm a CPA and could answer these questions if I wanted to. However, ten years from now, our profession will be better served if you actually LOOKED UP THE ANSWER ON YOUR OWN AND COMMITTED IT TO MEMORY!
Reply:I'm not sure about the first question...i think you might be missing a word. But if you're asking which one would be considered revenue, it would be A. B. would be interest income. For the second question, both A and C are correct.
Reply:I don't think it's a home work. The above questions might have been difficult to them or some controversies might arise in selecting the answer. That's why people come to this internet world. Everybody wants to empower them in this internet world. definitely I will give the answer If I am a CPA. Anyway I will forward this question to some of my auditor friends and give the answer. I am sure some people will help you before me...





thanks a lot and excuse me for my English,,,


suresh.........
Reply:The first question has a problem. Like there is no verb in the sentence. So I have no idea what is being asked. However, neither the intial investment in the company (capital), nor interest earned on bank accounts (other income) are considered "revenue". Revenue comes from business operations.





For the second question:


A.


C may also be true, but not necessarily. It could also paired with a debit to expense.
Reply:the second answer is "A", a credit to a liability is an increase in amount owed to creditors.





first answer is B.