Question 1

A withdrawal of funds by the owner for personal use is considered a business expense.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following equations is the Fundamental Accounting Equation?

Accepted Answer

A) Assets - Owner's Equity = Liabilities 
B) Assets + Liabilities = Owner's Equity 
C) Assets = Liabilities + Owner's Equity 
D) Assets - Liabilities = Owner's Equity 
A) Assets - Owner's Equity = Liabilities 
B) Assets + Liabilities = Owner's Equity 
C) Assets = Liabilities + Owner's Equity 
D) Assets - Liabilities = Owner's Equity

Question 3

A company has assets of $56,320 and liabilities of $29,500. The owner's equity is $85,820.

Accepted Answer

A) True 
 B)False

Question 4

Which financial statement is reported as of a specific date?

Accepted Answer

A) Statement of Changes in Financial Position 
B) Income Statement 
C) Statement of Owner's Equity 
D) Balance Sheet 
A) Statement of Changes in Financial Position 
B) Income Statement 
C) Statement of Owner's Equity 
D) Balance Sheet

Question 5

Assets always equal debts of the business plus the financial interest of the owner.

Accepted Answer

A) True 
 B)False

Question 6

The three-line heading of a financial statement shows who, what, and ________.

Accepted Answer

The answer of The three-line heading of a financial statement...

Question 7

On June 1, Donna Banhil established Solo Services, a voice consulting service. Enter the following transactions for June in the table below using + and - to indicate increases or decreases:
Transactions
1. Donna Banhil invested $21,000 in cash to open the business
2. Paid $1,650 for June's rent
3. Paid $4,950 for rent in advance, for the next three months (July-September)
4. Purchased office supplies for $550 on credit
5. Performed voice consulting services and immediately received $3,300 from clients.
6. Gave voice lessons to charge account clients and earned $8,800
7. Paid $220 cash for the supplies purchased earlier in the month
8. Received $1,000 in cash from credit clients billed earlier in the month

Accepted Answer

The answer of On June 1, Donna Banhil established Solo...

Question 8

An Income Statement is all of the following except:

Accepted Answer

A) a profit and loss statement. 
B) a formal report of business operations. 
C) a statement of income and expenses. 
D) a statement of revenues less withdrawals and expenses. 
A) a profit and loss statement. 
B) a formal report of business operations. 
C) a statement of income and expenses. 
D) a statement of revenues less withdrawals and expenses.

Question 9

Assets and liabilities are reported on:

Accepted Answer

A) both the balance sheet and the income statement. 
B) the statement of owner's equity. 
C) the income statement. 
D) the balance sheet. 
A) both the balance sheet and the income statement. 
B) the statement of owner's equity. 
C) the income statement. 
D) the balance sheet.

Question 10

During October, a firm had the following transactions involving revenue and expenses. Did the firm earn a net income or incur a net loss for the period? What was the amount?
Paid $1,600 for rent for October 
Provided services for $4,750 in cash
Paid $350 for the October telephone service 
Provided services for $1,700 on credit
Paid salaries of $2,675 to employees
Paid $350 for the monthly office cleaning service

Accepted Answer

The answer of During October, a firm had the following...

Question 11

When cash is paid to a creditor, the firm's liabilities decrease.

Accepted Answer

A) True 
 B)False

Question 12

On the income statement, revenues minus expenses equals ________ for a period of time.

Accepted Answer

Net income

Question 13

At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $11,350; Prepaid Insurance, $400; Equipment, $26,200 and Cash, $21,650. On the same date, SloMo owed the following creditors: Simpson Supply Company, $17,000; Allen Office Equipment, $14,500.
The total amount of Liabilities is:

Accepted Answer

A) $17,000. 
B) $14,500. 
C) $28,100. 
D) $31,500. 
A) $17,000. 
B) $14,500. 
C) $28,100. 
D) $31,500.

Question 14

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.
$\begin{array}{|l|l|}
\hline \text { Cash } & \text { K. Mitchell, Capital } \
\hline \text { Accounts Receivable } & \text { Revenue } \
\hline \text { Equipment } & \text { Expenses } \
\hline \text { Accounts Payable } & \
\hline
\end{array}$
-Purchased a computer for cash

Accepted Answer

plus Equip

Question 15

A net loss results:

Accepted Answer

A) when revenue is greater than expenses. 
B) when expenses are greater than assets. 
C) when expenses are greater than revenue. 
D) when assets are greater than liabilities. 
A) when revenue is greater than expenses. 
B) when expenses are greater than assets. 
C) when expenses are greater than revenue. 
D) when assets are greater than liabilities.

Question 16

If the income statement covered a six-month period ending on November 30, 2019, the third line of the income statement heading would read:

Accepted Answer

A) Month of November, 2019. 
B) November 30, 2019. 
C) Six-month Period Ended November 30, 2019. 
D) Month Ended November 30, 2019. 
A) Month of November, 2019. 
B) November 30, 2019. 
C) Six-month Period Ended November 30, 2019. 
D) Month Ended November 30, 2019.

Question 17

The Statement of Owner's Equity is calculated as follows:

Accepted Answer

A) beginning capital + net income - withdrawals + additional investments = ending capital 
B) beginning capital + net income + withdrawals + additional investments = ending capital 
C) beginning capital + net loss - withdrawals + additional investments = ending capital 
D) beginning capital + net loss + withdrawals + additional investments = ending capital 
A) beginning capital + net income - withdrawals + additional investments = ending capital 
B) beginning capital + net income + withdrawals + additional investments = ending capital 
C) beginning capital + net loss - withdrawals + additional investments = ending capital 
D) beginning capital + net loss + withdrawals + additional investments = ending capital

Question 18

When using the fundamental accounting equation, an accountant must make sure that total assets are always equal to total liabilities minus owner's equity.

Accepted Answer

A) True 
 B)False

Question 19

The ________ reports the changes that have occurred in the owner's financial interest during the accounting period.

Accepted Answer

statement

Question 20

The owner's investment or equity in a business is called:

Accepted Answer

A) accounts payable. 
B) drawing. 
C) cash. 
D) capital. 
A) accounts payable. 
B) drawing. 
C) cash. 
D) capital.

Exam 2: Analyzing Business Transactions

A withdrawal of funds by the owner for personal use is considered a business expense.

Which of the following equations is the Fundamental Accounting Equation?

A company has assets of $56,320 and liabilities of $29,500. The owner's equity is $85,820.

Which financial statement is reported as of a specific date?

Assets always equal debts of the business plus the financial interest of the owner.

The three-line heading of a financial statement shows who, what, and ________.

An Income Statement is all of the following except:

Assets and liabilities are reported on:

When cash is paid to a creditor, the firm's liabilities decrease.

On the income statement, revenues minus expenses equals ________ for a period of time.

A net loss results:

If the income statement covered a six-month period ending on November 30, 2019, the third line of the income statement heading would read:

The Statement of Owner's Equity is calculated as follows:

When using the fundamental accounting equation, an accountant must make sure that total assets are always equal to total liabilities minus owner's equity.

The ________ reports the changes that have occurred in the owner's financial interest during the accounting period.

The owner's investment or equity in a business is called:

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

Filters