1. An expense should be recorded when:

A. the bill is paid.

B. a bill is received in the mail.

C. cash is sufficient to pay the bill.

D. when the expense is incurred .

2. The financial statement that shows business results in terms of revenue and expenses is:

A. an income statement.

B. a balance sheet.

C. a statement of owner's equity.

D. the statement of cash flows.

3. James purchased a new computer for the company on account. The transaction will:

A. increase Computer; increase Capital.

B. decrease Cash; increase Accounts Payable.

C. decrease Cash; increase Computer.

D. increase Computer; increase Accounts Payable.