Question 1

When equipment is purchased on credit,

Accepted Answer

A) assets increase and liabilities decrease. 
B) assets and owner's equity increase. 
C) assets and expenses increase. 
D) assets and liabilities increase. 
A) assets increase and liabilities decrease. 
B) assets and owner's equity increase. 
C) assets and expenses increase. 
D) assets and liabilities increase.

Question 2

When a business sells services for cash, assets increase and revenue ________.

Accepted Answer

The answer of When a business sells services for cash,...

Question 3

The following information should be used for questions 99-100.

Cullen Beatty plans to start a consulting business–Cullen Consulting Services. In preparation to do this, on April 1, 2019, he invested $56,000 in cash and $23,000 in equipment, and opened an account at Office Plus by purchasing $1,750 in office supplies which is due by the end of the month. He then signed a one-year lease agreement on an office building for $8,400, paying the full amount in advance.
-Prepare a Balance Sheet for Cullen Consulting Services as of April 1, 2019, before he conducts any services.

Accepted Answer

Cullen Consulting Se

Question 4

When revenue is greater than expenses, the result is a net ________.

Accepted Answer

The answer of When revenue is greater than expenses, the...

Question 5

Which financial statement is a representation of the accounting equation?

Accepted Answer

A) Balance Sheet 
B) Income Statement 
C) Statement of Owner's Equity 
D) Profit and Loss Statement. 
A) Balance Sheet 
B) Income Statement 
C) Statement of Owner's Equity 
D) Profit and Loss Statement.

Question 6

If there is an excess of expenses over revenues, the excess represents a profit.

Accepted Answer

A) True 
 B)False

Question 7

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.
$\begin{array}{|l|l|}
\hline \text { Cash } & \text { K. Mitchell, Capital } \
\hline \text { Accounts Receivable } & \text { Revenue } \
\hline \text { Equipment } & \text { Expenses } \
\hline \text { Accounts Payable } & \
\hline
\end{array}$
-Sent a check to a creditor

Accepted Answer

minus Acco

Question 8

Given the options below, identify the correct accounting equation formula.

Accepted Answer

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

Question 9

When the owner writes a company check to pay the company's electric bill,

Accepted Answer

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

Question 10

When cash is collected from accounts receivable, the total amount of assets increases.

Accepted Answer

A) True 
 B)False

Question 11

When the owner withdraws cash for personal use,

Accepted Answer

A) assets decrease and owner's equity decreases. 
B) assets decrease and owner's equity increases. 
C) assets decrease and expenses increase. 
D) owner's equity decreases and revenue decreases. 
A) assets decrease and owner's equity decreases. 
B) assets decrease and owner's equity increases. 
C) assets decrease and expenses increase. 
D) owner's equity decreases and revenue decreases.

Question 12

When a business pays cash for salaries, assets decrease and expenses ________.

Accepted Answer

The answer of When a business pays cash for salaries,...

Question 13

The statement of financial position is another term for which financial statement?

Accepted Answer

A) Balance Sheet 
B) Income Statement 
C) Statement of Owner's Equity 
D) Trial Balance 
A) Balance Sheet 
B) Income Statement 
C) Statement of Owner's Equity 
D) Trial Balance

Question 14

The rent paid for future months is a(n):

Accepted Answer

A) asset. 
B) liability. 
C) revenue. 
D) expense. 
A) asset. 
B) liability. 
C) revenue. 
D) expense.

Question 15

In a business transaction, when revenue increases, owner's equity will ________ .

Accepted Answer

The answer of In a business transaction, when revenue increases,...

Question 16

Choose the option below that reflects the correct order in which to prepare the three financial statements

Accepted Answer

A) Income Statement; Statement of Owner's Equity; Balance Sheet. 
B) Statement of Owner's Equity; Balance Sheet; Income Statement. 
C) Income Statement; Balance Sheet; Statement of Owner's Equity. 
D) Balance Sheet; Income Statement; Statement of Owner's Equity. 
A) Income Statement; Statement of Owner's Equity; Balance Sheet. 
B) Statement of Owner's Equity; Balance Sheet; Income Statement. 
C) Income Statement; Balance Sheet; Statement of Owner's Equity. 
D) Balance Sheet; Income Statement; Statement of Owner's Equity.

Question 17

The statement of owner's equity is prepared before the balance sheet so that the ending capital balance is available.

Accepted Answer

A) True 
 B)False

Question 18

Guy McKinley started the McKinley Charter Service at the beginning of August 2019. On August 31, 2019, the accounting records of the business showed the following information. Prepare an income statement and a statement of owner's equity for the month and a balance sheet as of August 31, 2019.
 $\begin{array}{|l|r|r|r|}
\hline \text { Equipment } & \$ 18,000 & \text { Rent Expense } & \$ 4,800 \
\hline \text { Accounts Receivable } & 2,600 & \text { Cash } & 6,200 \\hline \text { Fees Income } & 30,000 & \text { Salaries Expense } & 10,800 \
\hline \text { Boats } & 103,000 & \text { Utilities Expense } & 1,900 \
\hline \text { Gasoline Expense } & 7,500 & \text { Supplies } & 3,600 \\hline \text { Loans Payable } & 77,500 & \text { Initial Investment } & 51,000 \
\hline \text { Owners' Withdrawal } & 4,100 & \text { Accounts Payable } & 4,000\
\hline
\end{array}$

Accepted Answer

MCKINLEY CHARTER SERVICE
Income Statemen

Question 19

The account used to record amounts that are owed for goods or services purchased on credit is known as ________.

Accepted Answer

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

Question 20

The Balance Sheet heading includes each of the following except:

Accepted Answer

A) firm's address. 
B) title of the report. 
C) date of the report. 
D) firm's name. 
A) firm's address. 
B) title of the report. 
C) date of the report. 
D) firm's name.

Exam 2: Analyzing Business Transactions

When equipment is purchased on credit,

When a business sells services for cash, assets increase and revenue ________.

When revenue is greater than expenses, the result is a net ________.

Which financial statement is a representation of the accounting equation?

If there is an excess of expenses over revenues, the excess represents a profit.

Given the options below, identify the correct accounting equation formula.

When the owner writes a company check to pay the company's electric bill,

When cash is collected from accounts receivable, the total amount of assets increases.

When the owner withdraws cash for personal use,

When a business pays cash for salaries, assets decrease and expenses ________.

The statement of financial position is another term for which financial statement?

The rent paid for future months is a(n):

In a business transaction, when revenue increases, owner's equity will ________ .

Choose the option below that reflects the correct order in which to prepare the three financial statements

The statement of owner's equity is prepared before the balance sheet so that the ending capital balance is available.

The account used to record amounts that are owed for goods or services purchased on credit is known as ________.

The Balance Sheet heading includes each of the following except:

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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