Question 1

For EFG Co., the transaction "billed a customer for fees earned" would:

Accepted Answer

A)  increase total assets. 
B)  decrease total assets. 
C)  have no effect on total assets. 
D)  increase total liabilities. 
A)  increase total assets. 
B)  decrease total assets. 
C)  have no effect on total assets. 
D)  increase total liabilities.

Question 2

Lazer Company paid a utility bill of $12,000 and paid rent of $20,000.As a result of these transactions, the stockholders' equity:

Accepted Answer

A)  increases by $8,000. 
B)  decreases by $32,000. 
C)  increases by $20,000. 
D)  decreases by $12,000. 
A)  increases by $8,000. 
B)  decreases by $32,000. 
C)  increases by $20,000. 
D)  decreases by $12,000.

Question 3

Which of the following group of accounts are all assets?

Accepted Answer

A)  Cash, Accounts Payable, Buildings 
B)  Accounts Receivable, Revenue, Cash 
C)  Prepaid Expenses, Buildings, Patents 
D)  Unearned Revenues, Prepaid Expenses, Cash 
A)  Cash, Accounts Payable, Buildings 
B)  Accounts Receivable, Revenue, Cash 
C)  Prepaid Expenses, Buildings, Patents 
D)  Unearned Revenues, Prepaid Expenses, Cash

Question 4

Stockholders' equity will be reduced by:

Accepted Answer

A)  payment of dividends. 
B)  increase in revenues. 
C)  owners' investments. 
D)  issuance of bonds. 
A)  payment of dividends. 
B)  increase in revenues. 
C)  owners' investments. 
D)  issuance of bonds.

Question 5

Equality of the accounting equation means that no errors have occurred.

Accepted Answer

A) True 
 B)False

Question 6

It is possible for a transaction to change the makeup of assets, but to not affect assets in total.

Accepted Answer

A) True 
 B)False

Question 7

A common-sized balance sheet is prepared by expressing each liability item as a percent of:

Accepted Answer

A)  total sales. 
B)  total stockholders' equity. 
C)  total liabilities. 
D)  total liabilities plus stockholders' equity. 
A)  total sales. 
B)  total stockholders' equity. 
C)  total liabilities. 
D)  total liabilities plus stockholders' equity.

Question 8

Johnson, Inc.paid rent expense of $3,500 for the month of October.How are the accounts affected due to this transaction?

Accepted Answer

A)  Increase in cash $3,500 and increase in retained earnings $3,500 
B)  Increase in cash $3,500 and decrease in retained earnings $3,500 
C)  Decrease in cash $3,500 and decrease in retained earnings $3,500 
D)  Decrease in cash $3,500 and increase in retained earnings $3,500 
A)  Increase in cash $3,500 and increase in retained earnings $3,500 
B)  Increase in cash $3,500 and decrease in retained earnings $3,500 
C)  Decrease in cash $3,500 and decrease in retained earnings $3,500 
D)  Decrease in cash $3,500 and increase in retained earnings $3,500

Question 9

The accounting equation "Assets = Liabilities + Stockholders' Equity" is affected by transactions.Is it possible to have a transaction that only impacts one financial element of the equation? Can a transaction impact two elements of the equation? Give examples.

Accepted Answer

Yes to both questions.Examples

Question 10

Retained earnings will be increased by the amount in the dividend account.

Accepted Answer

A) True 
 B)False

Question 11

WFC Company paid wages of $50,000 and received interest of $60,000.As a result of these transactions, the stockholders' equity:

Accepted Answer

A)  increases by $ 60,000. 
B)  decreases by $110,000. 
C)  increases by $10,000. 
D)  decreases by $50,000. 
A)  increases by $ 60,000. 
B)  decreases by $110,000. 
C)  increases by $10,000. 
D)  decreases by $50,000.

Question 12

A common-sized income statement is prepared by expressing income statement amounts as a percent of _____.

Accepted Answer

A)  sales 
B)  purchases 
C)  total assets 
D)  profit 
A)  sales 
B)  purchases 
C)  total assets 
D)  profit

Question 13

Anthony, Inc.buys land for $50,000 cash.The net effect on assets is:

Accepted Answer

A)  $50,000 increase. 
B)  $0. 
C)  $50,000 decrease. 
D)  $25,000 increase. 
A)  $50,000 increase. 
B)  $0. 
C)  $50,000 decrease. 
D)  $25,000 increase.

Question 14

The stockholders' equity will increase as a result of the:

Accepted Answer

A)  issue of common stock. 
B)  repayment of long-term debt. 
C)  buyback of common stock. 
D)  issue of long-term debt. 
A)  issue of common stock. 
B)  repayment of long-term debt. 
C)  buyback of common stock. 
D)  issue of long-term debt.

Question 15

When common stock is issued by a corporation for cash, both the income statement and the balance sheet are affected.

Accepted Answer

A) True 
 B)False

Question 16

ABC Company deposited $20,000 in a bank account in return for issuing shares in the corporation.This transaction would affect which two financial statement elements?

Accepted Answer

A)  Assets and stockholders' equity 
B)  Assets and liabilities 
C)  Liabilities and stockholders' equity 
D)  None of these 
A)  Assets and stockholders' equity 
B)  Assets and liabilities 
C)  Liabilities and stockholders' equity 
D)  None of these

Question 17

What are the basic elements of a financial accounting system?

Accepted Answer

A financial accounting system is designe

Question 18

Expenses can be defined as:

Accepted Answer

A)  assets consumed. 
B)  services used in the process of generating revenues. 
C)  costs that have been incurred during the normal course of business. 
D)  all of these. 
A)  assets consumed. 
B)  services used in the process of generating revenues. 
C)  costs that have been incurred during the normal course of business. 
D)  all of these.

Question 19

The accounting equation can be expressed as: Assets − Liabilities = Revenues.

Accepted Answer

A) True 
 B)False

For EFG Co., the transaction "billed a customer for fees earned" would:

Lazer Company paid a utility bill of $12,000 and paid rent of $20,000.As a result of these transactions, the stockholders' equity:

Which of the following group of accounts are all assets?

Stockholders' equity will be reduced by:

Equality of the accounting equation means that no errors have occurred.

It is possible for a transaction to change the makeup of assets, but to not affect assets in total.

A common-sized balance sheet is prepared by expressing each liability item as a percent of:

Johnson, Inc.paid rent expense of $3,500 for the month of October.How are the accounts affected due to this transaction?

The accounting equation "Assets = Liabilities + Stockholders' Equity" is affected by transactions.Is it possible to have a transaction that only impacts one financial element of the equation? Can a transaction impact two elements of the equation? Give examples.

Retained earnings will be increased by the amount in the dividend account.

WFC Company paid wages of $50,000 and received interest of $60,000.As a result of these transactions, the stockholders' equity:

A common-sized income statement is prepared by expressing income statement amounts as a percent of _____.

Anthony, Inc.buys land for $50,000 cash.The net effect on assets is:

The stockholders' equity will increase as a result of the:

When common stock is issued by a corporation for cash, both the income statement and the balance sheet are affected.

ABC Company deposited $20,000 in a bank account in return for issuing shares in the corporation.This transaction would affect which two financial statement elements?

What are the basic elements of a financial accounting system?

Expenses can be defined as:

The accounting equation can be expressed as: Assets − Liabilities = Revenues.

The Role of Accounting in Business

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 2: Basic Accounting Systems: Cash Basis

For EFG Co., the transaction "billed a customer for fees earned" would:

Lazer Company paid a utility bill of $12,000 and paid rent of $20,000.As a result of these transactions, the stockholders' equity:

Which of the following group of accounts are all assets?

Stockholders' equity will be reduced by:

Equality of the accounting equation means that no errors have occurred.

It is possible for a transaction to change the makeup of assets, but to not affect assets in total.

A common-sized balance sheet is prepared by expressing each liability item as a percent of:

Johnson, Inc.paid rent expense of $3,500 for the month of October.How are the accounts affected due to this transaction?

The accounting equation "Assets = Liabilities + Stockholders' Equity" is affected by transactions.Is it possible to have a transaction that only impacts one financial element of the equation? Can a transaction impact two elements of the equation? Give examples.

Retained earnings will be increased by the amount in the dividend account.

WFC Company paid wages of $50,000 and received interest of $60,000.As a result of these transactions, the stockholders' equity:

A common-sized income statement is prepared by expressing income statement amounts as a percent of _____.

Anthony, Inc.buys land for $50,000 cash.The net effect on assets is:

The stockholders' equity will increase as a result of the:

When common stock is issued by a corporation for cash, both the income statement and the balance sheet are affected.

ABC Company deposited $20,000 in a bank account in return for issuing shares in the corporation.This transaction would affect which two financial statement elements?

What are the basic elements of a financial accounting system?

Expenses can be defined as:

The accounting equation can be expressed as: Assets − Liabilities = Revenues.

The Role of Accounting in Business

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters