Question 1

If expenses are less than revenue, a net income is incurred.

Accepted Answer

A) True 
 B)False

Question 2

Katelyn purchased $11,000 of new electronic equipment for her DJ Company on account. The effect on the basic accounting equation was to:

Accepted Answer

A) decrease Cash $11,000 and increase Equipment $11,000. 
B) increase Equipment $11,000 and increase Accounts Payable $11,000. 
C) decrease Cash $11,000 and increase Accounts Payable $11,000. 
D) increase Cash $11,000 and increase Equipment $11,000. 
A) decrease Cash $11,000 and increase Equipment $11,000. 
B) increase Equipment $11,000 and increase Accounts Payable $11,000. 
C) decrease Cash $11,000 and increase Accounts Payable $11,000. 
D) increase Cash $11,000 and increase Equipment $11,000.

Question 3

Which of the following will be recorded in the owner's equity column as an increase?

Accepted Answer

A) An exchange of assets 
B) The purchase of an asset on credit 
C) An investment by the owner 
D) A withdrawal by the owner 
A) An exchange of assets 
B) The purchase of an asset on credit 
C) An investment by the owner 
D) A withdrawal by the owner

Question 4

Calculate the total Assets if the company has: Cash $200, Accounts Receivable $300, Accounts Payable $500, Equipment $500.
$ ________

Accepted Answer

($1,000 =

Question 5

If beginning capital was $110,000, ending capital is $95,000, and the owner's withdrawals were $10,000, the amount of net income or net loss was:

Accepted Answer

A) net income of $5,000. 
B) net income of $15,000. 
C) net loss of $15,000. 
D) net loss of $5,000. 
A) net income of $5,000. 
B) net income of $15,000. 
C) net loss of $15,000. 
D) net loss of $5,000.

Question 6

Ryan withdrew cash from the business to pay his personal cell phone bill. The expanded accounting equation changes include:

Accepted Answer

A) increase in both Cash and Withdrawal. 
B) decrease in both Cash and Withdrawal. 
C) decrease in Cash and increase in Withdrawal. 
D) increase in Cash and decrease in Withdrawal. 
A) increase in both Cash and Withdrawal. 
B) decrease in both Cash and Withdrawal. 
C) decrease in Cash and increase in Withdrawal. 
D) increase in Cash and decrease in Withdrawal.

Question 7

Creditors' claims against assets are called owner's equity.

Accepted Answer

A) True 
 B)False

Question 8

If the liabilities owed by a business total $250,000, then the assets must also total $250,000.

Accepted Answer

A) True 
 B)False

Question 9

An expense should be recorded when:

Accepted Answer

A) the bill is paid. 
B) the expense is incurred. 
C) a bill is received in the mail. 
D) None of the above are correct. 
A) the bill is paid. 
B) the expense is incurred. 
C) a bill is received in the mail. 
D) None of the above are correct.

Question 10

Determine the beginning capital balance of a business having an ending capital balance of $10,900, no additional investments, withdrawals of $2,500, and a net income of $4,100.
$ ________

Accepted Answer

$9,300 [$1

Question 11

If total assets are $30,000 and total liabilities are $18,000, Capital must equal:

Accepted Answer

A) $12,000. 
B) $28,000. 
C) $8,000. 
D) $20,000. 
A) $12,000. 
B) $28,000. 
C) $8,000. 
D) $20,000.

Question 12

When services are rendered but payment is not made, which account would be increased?

Accepted Answer

A) Accounts Receivable 
B) Accounts Payable 
C) Cash 
D) Withdrawal 
A) Accounts Receivable 
B) Accounts Payable 
C) Cash 
D) Withdrawal

Question 13

Which is an advantage of a sole proprietorship form of business?

Accepted Answer

A) There is limited personal risk. 
B) The business can continue indefinitely. 
C) The owner makes all the decisions. 
D) All of these answers are correct. 
A) There is limited personal risk. 
B) The business can continue indefinitely. 
C) The owner makes all the decisions. 
D) All of these answers are correct.

Question 14

Discuss the advantages and disadvantages of sole proprietorships, partnerships and corporations.

Accepted Answer

A sole proprietorship is a business that

Question 15

The Sarbanes-Oxley Act was passed to:

Accepted Answer

A) prevent fraud at public companies. 
B) replace all of the old accounting procedures with new ones. 
C) improve the accuracy of the company's financial reporting. 
D) Both A and C are correct. 
A) prevent fraud at public companies. 
B) replace all of the old accounting procedures with new ones. 
C) improve the accuracy of the company's financial reporting. 
D) Both A and C are correct.

Question 16

Katie's Wedding Planning Service completed the following transactions:
a. Billed clients for service, $1,250.
b. Completed work for clients who paid $500 cash.
c. Received a bill for utilities to be paid later, $120.
d. Collected cash on account from clients, $700.
e. Paid the amount due for utilities.
f. Withdrew $500 cash for personal use.
Required: Record the above transactions in the expanded accounting equation. Note that the items have beginning balances.

Accepted Answer

The answer of Katie's Wedding Planning Service completed the following...

Question 17

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

Accepted Answer

A) increase Computer; increase Capital. 
B) decrease Cash; increase Accounts Payable. 
C) decrease Cash; increase Computer. 
D) increase Computer; increase Accounts Payable. 
A) increase Computer; increase Capital. 
B) decrease Cash; increase Accounts Payable. 
C) decrease Cash; increase Computer. 
D) increase Computer; increase Accounts Payable.

Question 18

An acceptable variation of the accounting equation is:

Accepted Answer

A) Assets - Liabilities = Owner's Equity. 
B) Assets + Owner's Equity = Liabilities. 
C) Assets = Liabilities - Owner's Equity. 
D) All of these answers are correct. 
A) Assets - Liabilities = Owner's Equity. 
B) Assets + Owner's Equity = Liabilities. 
C) Assets = Liabilities - Owner's Equity. 
D) All of these answers are correct.

Question 19

A purchase of a vehicle for cash would have what affect on the accounting equation?

Accepted Answer

A) Total asset amount remains the same. 
B) Total liabilities are overstated. 
C) Total owner's equity is overstated. 
D) Both A and B are correct. 
A) Total asset amount remains the same. 
B) Total liabilities are overstated. 
C) Total owner's equity is overstated. 
D) Both A and B are correct.

Question 20

The increase or decrease in the owner's equity is reported on the:

Accepted Answer

A) income statement. 
B) statement of owner's equity. 
C) balance sheet. 
D) All of these are correct. 
A) income statement. 
B) statement of owner's equity. 
C) balance sheet. 
D) All of these are correct.

Exam 1: Accounting Concepts and Procedures

If expenses are less than revenue, a net income is incurred.

Katelyn purchased $11,000 of new electronic equipment for her DJ Company on account. The effect on the basic accounting equation was to:

Which of the following will be recorded in the owner's equity column as an increase?

Calculate the total Assets if the company has: Cash $200, Accounts Receivable $300, Accounts Payable $500, Equipment $500. $ ________

If beginning capital was $110,000, ending capital is $95,000, and the owner's withdrawals were $10,000, the amount of net income or net loss was:

Ryan withdrew cash from the business to pay his personal cell phone bill. The expanded accounting equation changes include:

Creditors' claims against assets are called owner's equity.

If the liabilities owed by a business total $250,000, then the assets must also total $250,000.

An expense should be recorded when:

Determine the beginning capital balance of a business having an ending capital balance of $10,900, no additional investments, withdrawals of $2,500, and a net income of $4,100. $ ________

If total assets are $30,000 and total liabilities are $18,000, Capital must equal:

When services are rendered but payment is not made, which account would be increased?

Which is an advantage of a sole proprietorship form of business?

Discuss the advantages and disadvantages of sole proprietorships, partnerships and corporations.

The Sarbanes-Oxley Act was passed to:

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

An acceptable variation of the accounting equation is:

A purchase of a vehicle for cash would have what affect on the accounting equation?

The increase or decrease in the owner's equity is reported on the:

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes: the Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters