Question 1

A business transaction is a financial event that affects the resources of a business.

Accepted Answer

A) True 
 B)False

Question 2

The balance sheet shows:

Accepted Answer

A) all revenues and expenses. 
B) the financial position of a business at a given time. 
C) the results of business operations. 
D) the amount of net income or loss. 
A) all revenues and expenses. 
B) the financial position of a business at a given time. 
C) the results of business operations. 
D) the amount of net income or loss.

Question 3

If a business receives $5,000 on account from clients who owed money for services previously billed, identify the effect on the accounting equation:

Accepted Answer

A) assets decrease and liabilities increase. 
B) assets remain the same and owner's equity remains the same. 
C) liabilities decrease and owner's equity decreases. 
D) owner's equity increases and revenue increases. 
A) assets decrease and liabilities increase. 
B) assets remain the same and owner's equity remains the same. 
C) liabilities decrease and owner's equity decreases. 
D) owner's equity increases and revenue increases.

Question 4

Examples of assets are:

Accepted Answer

A) cash and accounts receivable. 
B) investments by the owner and revenue. 
C) accounts receivable and rent expense. 
D) equipment and revenue. 
A) cash and accounts receivable. 
B) investments by the owner and revenue. 
C) accounts receivable and rent expense. 
D) equipment and revenue.

Question 5

Which of the following is an example of an expense:

Accepted Answer

A) an owner withdrawal for personal use. 
B) the payment of the monthly utility bill. 
C) the receipt of cash from a credit customer. 
D) the payment of a creditor on account. 
A) an owner withdrawal for personal use. 
B) the payment of the monthly utility bill. 
C) the receipt of cash from a credit customer. 
D) the payment of a creditor on account.

Question 6

The account used to record amounts that will be collected from charge account customers in the future is referred to as ________ .

Accepted Answer

The answer of The account used to record amounts that...

Question 7

The debts or obligations of a business are known as its ________.

Accepted Answer

The answer of The debts or obligations of a business...

Question 8

At the end of the first month of operations for Jackson's Catering Service, the business had the following accounts: Cash, $21,000; Prepaid Rent, $500; Equipment, $7,500 and Accounts Payable
$4,000. By the end of the month, Jackson's had earned $32,000 of Revenues, and used $1,800 of Utilities Expenses, $4,000 of Rent Expense and $3,600 of Salaries Expenses. Calculate the net income to be reported by the company for this first month.

Accepted Answer

A) $32,000 
B) $26,200 
C) $22,600 
D) $23,100 
A) $32,000 
B) $26,200 
C) $22,600 
D) $23,100

Question 9

The following information should be used for questions.
The transactions listed below took place at the Mitchell Advertising Agency. These transactions affected the following accounts. Indicate the accounts affected and use plus and minus to show the changes caused by each transaction.
$\begin{array}{|l|l|}
\hline \text { Cash } & \text { K. Mitchell, Capital } \
\hline \text { Accounts Receivable } & \text { Revenue } \
\hline \text { Equipment } & \text { Expenses } \
\hline \text { Accounts Payable } & \
\hline
\end{array}$
-Paid cash for utilities

Accepted Answer

plus Expen

Question 10

Amounts that a business must pay in the future are known as:

Accepted Answer

A) capital. 
B) liabilities. 
C) expenses. 
D) assets. 
A) capital. 
B) liabilities. 
C) expenses. 
D) assets.

Question 11

If a business issues a check for $100 to purchase office supplies, What is the effect on the accounting equation?

Accepted Answer

A) Owner's Equity will decrease 
B) Assets will decrease 
C) Owner's Equity will increase 
D) Total Assets will remain the same 
A) Owner's Equity will decrease 
B) Assets will decrease 
C) Owner's Equity will increase 
D) Total Assets will remain the same

Question 12

The entire process of analyzing, recording, and reporting business transactions is based on the fundamental accounting equation.

Accepted Answer

A) True 
 B)False

Question 13

The following information should be used for questions.
On September 1, Shawn Dahl established Whitewater Rentals, a canoe and kayak rental business. The following transactions occurred in the month of September and affected the following accounts:
$\begin{array}{|l|l|}
\hline \text { Cash } & \text { Accounts Payable } \
\hline \text { Accounts Receivable } & \text { Shawn Dahl, Capital } \
\hline \text { Office Equipment } & \text { Revenue } \
\hline \text { Canoe and Kayak Equipment } & \text { Expenses } \
\hline
\end{array}$
Transactions
1.Shawn Dahl invested $50,000 in cash to open the business
2.Paid $14,200 in cash for the purchase of kayak and canoe equipment
3.Paid $2,200 in cash for rent expense
4.Purchased additional kayak and canoe equipment for $4,900 on credit
5.Received $4,600 in cash for kayak rentals
6.Rented canoes and kayaks for $3,400 on account
7.Purchased office equipment for $375 in cash
8.Received $1,350 in cash from credit clients
9.Shawn Dahl withdrew $1,800 in cash for personal expenses
-Based on the information shown in transaction #4 above, indicate the accounts affected and use plus and minus to show the changes caused by the transaction.

Accepted Answer

plus Canoe and Kayak

Question 14

Identify the account below that is classified as an asset account and would appear on the left side of the accounting equation.

Accepted Answer

A) Accounts Payable. 
B) Owner's Capital. 
C) Fees Income. 
D) Accounts Receivable. 
A) Accounts Payable. 
B) Owner's Capital. 
C) Fees Income. 
D) Accounts Receivable.

Question 15

When equipment is purchased for cash,

Accepted Answer

A) assets decrease and expenses increase. 
B) one asset increases and another asset decreases. 
C) assets increase and liabilities decrease. 
D) assets and owner's equity increase. 
A) assets decrease and expenses increase. 
B) one asset increases and another asset decreases. 
C) assets increase and liabilities decrease. 
D) assets and owner's equity increase.

Question 16

The financial interest of the owner in a business is called owner's equity or ________.

Accepted Answer

The answer of The financial interest of the owner in...

Question 17

If a business issued a check for $1,000 to pay for two months rent in advance, what is the effect on the firms' assets, liabilities and owner's equity.

Accepted Answer

A) Owner's Capital will increase 
B) Accounts Payable will increase 
C) Prepaid Rent will decrease 
D) Cash will decrease 
A) Owner's Capital will increase 
B) Accounts Payable will increase 
C) Prepaid Rent will decrease 
D) Cash will decrease

Question 18

The income statement is also known as the profit and loss statement.

Accepted Answer

A) True 
 B)False

Question 19

If the owner takes cash out of the business for personal use, the withdrawal should be recorded as an expense of the business.

Accepted Answer

A) True 
 B)False

Question 20

The expenses for a period are reported on the balance sheet.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing Business Transactions

A business transaction is a financial event that affects the resources of a business.

The balance sheet shows:

If a business receives $5,000 on account from clients who owed money for services previously billed, identify the effect on the accounting equation:

Examples of assets are:

Which of the following is an example of an expense:

The account used to record amounts that will be collected from charge account customers in the future is referred to as ________ .

The debts or obligations of a business are known as its ________.

Amounts that a business must pay in the future are known as:

If a business issues a check for $100 to purchase office supplies, What is the effect on the accounting equation?

The entire process of analyzing, recording, and reporting business transactions is based on the fundamental accounting equation.

Identify the account below that is classified as an asset account and would appear on the left side of the accounting equation.

When equipment is purchased for cash,

The financial interest of the owner in a business is called owner's equity or ________.

If a business issued a check for $1,000 to pay for two months rent in advance, what is the effect on the firms' assets, liabilities and owner's equity.

The income statement is also known as the profit and loss statement.

If the owner takes cash out of the business for personal use, the withdrawal should be recorded as an expense of the business.

The expenses for a period are reported on the balance sheet.

Accounting: The Language of Business

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and Teh Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analysis

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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