Question 1

The claims of creditors against the assets are:

Accepted Answer

A) expenses. 
B) revenues. 
C) liabilities. 
D) owner's equity. 
A) expenses. 
B) revenues. 
C) liabilities. 
D) owner's equity.

Question 2

The basic accounting equation is:

Accepted Answer

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

Question 3

If 'Ol Fashioned Toys' revenues are greater than its expenses during the accounting period:

Accepted Answer

A) assets will increase more than liabilities. 
B) liabilities will increase more than assets. 
C) the business will incur a loss. 
D) the business will earn a net income. 
A) assets will increase more than liabilities. 
B) liabilities will increase more than assets. 
C) the business will incur a loss. 
D) the business will earn a net income.

Question 4

The type of business organization that can continue indefinitely is known as a:

Accepted Answer

A) sole proprietorship. 
B) partnership. 
C) corporation. 
D) None of the above 
A) sole proprietorship. 
B) partnership. 
C) corporation. 
D) None of the above

Question 5

The owner of a business paid personal rent with a company check. This payment reduces Cash as well as increases the expenses of the firm.

Accepted Answer

A) True 
 B)False

Question 6

The Owner's Equity of Logan's Company is equal to one-quarter of the total assets. Liabilities equal $60,000. What is the amount of Owner's Equity?

Accepted Answer

A) $40,000 
B) $20,000 
C) $30,000 
D) None of these answers are correct. 
A) $40,000 
B) $20,000 
C) $30,000 
D) None of these answers are correct.

Question 7

Generally Accepted Accounting Principles are the procedures and guidelines that must be followed during the accounting process.

Accepted Answer

A) True 
 B)False

Question 8

Mary invested cash in her new business. What effect will this have?

Accepted Answer

A) Increase an asset and increase a liability 
B) Decrease an asset and increase a liability 
C) Increase an asset and increase owner's equity 
D) Increase an asset and decrease owner's equity 
A) Increase an asset and increase a liability 
B) Decrease an asset and increase a liability 
C) Increase an asset and increase owner's equity 
D) Increase an asset and decrease owner's equity

Question 9

The payment of accounts payable would:

Accepted Answer

A) increase both assets and liabilities. 
B) increase assets and decrease liabilities. 
C) decrease both assets and liabilities. 
D) decrease assets and increase liabilities. 
A) increase both assets and liabilities. 
B) increase assets and decrease liabilities. 
C) decrease both assets and liabilities. 
D) decrease assets and increase liabilities.

Question 10

Which of the following transactions would cause an asset to decrease and the owner's equity to decrease?

Accepted Answer

A) The business provided services to a cash customer. 
B) The business bought supplies for cash. 
C) The owner withdrew cash from the business. 
D) The business bought supplies on account. 
A) The business provided services to a cash customer. 
B) The business bought supplies for cash. 
C) The owner withdrew cash from the business. 
D) The business bought supplies on account.

Question 11

If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in the owner's equity amount?

Accepted Answer

A) Increase of $2,000 
B) Decrease of $2,000 
C) Increase of $10,000 
D) Decrease of $10,000 
A) Increase of $2,000 
B) Decrease of $2,000 
C) Increase of $10,000 
D) Decrease of $10,000

Question 12

Accounts Receivable results from earning revenue when cash is not yet received.

Accepted Answer

A) True 
 B)False

Question 13

Record the following transactions into the expanded accounting equation for the Mayoras' Law Firm. Note that all titles have beginning balances. (You will need to determine the beginning capital balance.)
a. Provided legal services for cash, $1,200
b. Billed customers for services rendered, $2,400
c. Received and paid the monthly utility bill, $300
d. Collected $600 on account from customers
e. Paid supplies expense, $250
f. Withdrew $300 cash for personal use

Accepted Answer

The answer of Record the following transactions into the expanded...

Question 14

The purchase of supplies for cash would affect which account category?

Accepted Answer

A) Assets 
B) Liabilities 
C) Capital 
D) Expense 
A) Assets 
B) Liabilities 
C) Capital 
D) Expense

Question 15

Which of the following would result if the owner invested cash in the business?

Accepted Answer

A) Cash would increase and Capital would decrease. 
B) Cash would increase and Capital would increase. 
C) Cash would decrease and Capital would increase. 
D) An investment by the owner is not a business transaction. 
A) Cash would increase and Capital would decrease. 
B) Cash would increase and Capital would increase. 
C) Cash would decrease and Capital would increase. 
D) An investment by the owner is not a business transaction.

Question 16

Boxes R' Us paid $3,000 in salaries and wages for February. This transaction will:

Accepted Answer

A) increase expenses and decrease revenue. 
B) increase expenses and increase liabilities. 
C) decrease assets and increase expenses. 
D) decrease assets and expenses. 
A) increase expenses and decrease revenue. 
B) increase expenses and increase liabilities. 
C) decrease assets and increase expenses. 
D) decrease assets and expenses.

Question 17

Owner's withdrawals:

Accepted Answer

A) decrease assets. 
B) increase expenses. 
C) increase liabilities. 
D) decrease withdrawals. 
A) decrease assets. 
B) increase expenses. 
C) increase liabilities. 
D) decrease withdrawals.

Question 18

Legal services were provided to a credit customer. How would this affect the accounting equation?

Accepted Answer

A) Cash and Accounts Receivable increase. 
B) Accounts Payable and Capital increase. 
C) Accounts Receivable and Revenue increase. 
D) None of the above are correct. 
A) Cash and Accounts Receivable increase. 
B) Accounts Payable and Capital increase. 
C) Accounts Receivable and Revenue increase. 
D) None of the above are correct.

Question 19

Total assets are included in the statement of owner's equity.

Accepted Answer

A) True 
 B)False

Question 20

Which accounts are affected when the company buys supplies on account?

Accepted Answer

A) Assets and Capital 
B) Liabilities and Capital 
C) Assets and Liabilities 
D) None of the above are correct. 
A) Assets and Capital 
B) Liabilities and Capital 
C) Assets and Liabilities 
D) None of the above are correct.

Exam 1: Accounting Concepts and Procedures

The claims of creditors against the assets are:

The basic accounting equation is:

If 'Ol Fashioned Toys' revenues are greater than its expenses during the accounting period:

The type of business organization that can continue indefinitely is known as a:

The owner of a business paid personal rent with a company check. This payment reduces Cash as well as increases the expenses of the firm.

The Owner's Equity of Logan's Company is equal to one-quarter of the total assets. Liabilities equal $60,000. What is the amount of Owner's Equity?

Generally Accepted Accounting Principles are the procedures and guidelines that must be followed during the accounting process.

Mary invested cash in her new business. What effect will this have?

The payment of accounts payable would:

Which of the following transactions would cause an asset to decrease and the owner's equity to decrease?

If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in the owner's equity amount?

Accounts Receivable results from earning revenue when cash is not yet received.

The purchase of supplies for cash would affect which account category?

Which of the following would result if the owner invested cash in the business?

Boxes R' Us paid $3,000 in salaries and wages for February. This transaction will:

Owner's withdrawals:

Legal services were provided to a credit customer. How would this affect the accounting equation?

Total assets are included in the statement of owner's equity.

Which accounts are affected when the company buys supplies on account?

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

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