Question 1

Expenses are recorded

Accepted Answer

A)  when they are paid. 
B)  when they are incurred. 
C)  in advance or when they are due. 
D)  none of the answers listed. 
A)  when they are paid. 
B)  when they are incurred. 
C)  in advance or when they are due. 
D)  none of the answers listed. B

Question 2

If an owner invests his or her computer, printer, and cash in the business, there is an increase in:

Accepted Answer

A)  Cash and Accounts Payable. 
B)  Computer Equipment, Accounts Payable, and Drawing. 
C)  Cash and Drawing. 
D)  Computer Equipment and Expenses. 
E)  Computer Equipment, Cash, and Capital 
A)  Cash and Accounts Payable. 
B)  Computer Equipment, Accounts Payable, and Drawing. 
C)  Cash and Drawing. 
D)  Computer Equipment and Expenses. 
E)  Computer Equipment, Cash, and Capital E

Question 3

An exchange of assets has no effect on the totals of the accounting equation.

Accepted Answer

A) True 
 B)False  True

Question 4

D. Hoffman withdrew $20,000 for personal use from his business. This transaction should be recorded as a(n):

Accepted Answer

A)  increase in liabilities. 
B)  increase in revenue. 
C)  decrease in expenses. 
D)  decrease in owner's equity. 
A)  increase in liabilities. 
B)  increase in revenue. 
C)  decrease in expenses. 
D)  decrease in owner's equity.

Question 5

Which of the following is an example of an asset?

Accepted Answer

A)  Prepaid Insurance 
B)  Accounts Payable 
C)  Capital 
D)  Outstanding Rent 
A)  Prepaid Insurance 
B)  Accounts Payable 
C)  Capital 
D)  Outstanding Rent

Question 6

A business received $600 cash from charge customers to apply on account. The effect of the transaction is an increase in an asset and a(n)

Accepted Answer

A)  increase in revenue. 
B)  decrease in capital. 
C)  decrease in a liability. 
D)  decrease in an asset. 
E)  increase in capital. 
A)  increase in revenue. 
B)  decrease in capital. 
C)  decrease in a liability. 
D)  decrease in an asset. 
E)  increase in capital.

Question 7

Accounts Receivable is a(n)

Accepted Answer

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

Question 8

The effect of expenses on the fundamental accounting equation is a(n)

Accepted Answer

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

Question 9

The expanded accounting equation is

Accepted Answer

A)  assets = liabilities + capital + drawing + revenue - expenses 
B)  assets = liabilities - capital + drawing - revenue + expenses 
C)  assets = liabilities + capital - drawing + revenue - expenses 
D)  assets + capital = liabilities - drawing + revenue - expenses 
A)  assets = liabilities + capital + drawing + revenue - expenses 
B)  assets = liabilities - capital + drawing - revenue + expenses 
C)  assets = liabilities + capital - drawing + revenue - expenses 
D)  assets + capital = liabilities - drawing + revenue - expenses

Question 10

The purchase of an asset (like Equipment) on account will

Accepted Answer

A)  increase total liabilities and decrease total assets. 
B)  have no effect on total assets or total liabilities. 
C)  increase total assets and increase total liabilities. 
D)  increase total assets and increase owner's equity. 
E)  increase total assets and decrease owner's equity. 
A)  increase total liabilities and decrease total assets. 
B)  have no effect on total assets or total liabilities. 
C)  increase total assets and increase total liabilities. 
D)  increase total assets and increase owner's equity. 
E)  increase total assets and decrease owner's equity.

Question 11

Expenses incurred by a business results in:

Accepted Answer

A)  a decrease in its liabilities. 
B)  a decrease in the owner's equity. 
C)  an increase in the drawing. 
D)  an increase in the assets. 
A)  a decrease in its liabilities. 
B)  a decrease in the owner's equity. 
C)  an increase in the drawing. 
D)  an increase in the assets.

Question 12

Which of the following equations is the fundamental accounting equation?

Accepted Answer

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

Question 13

Accounts Payable is a(n)

Accepted Answer

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

Question 14

Match the terms below with the correct definitions.
-Assets minus liabilities

Accepted Answer

A) Creditor 
B) Fundamental accounting equation 
C) Expenses 
D) Accounts 
E) Owner's equity
F)Accounts receivable
G)Asset
H)Cash
I)Business entity 
A) Creditor 
B) Fundamental accounting equation 
C) Expenses 
D) Accounts 
E) Owner's equity
F)Accounts receivable
G)Asset
H)Cash
I)Business entity

Question 15

The owner of a business invested $5,000 in the business. What are the effects on the fundamental accounting equation?

Accepted Answer

A)  Assets increase $5,000; liabilities, no effect; owner's equity increases $5,000 
B)  Assets increase $5,000; liabilities decrease $5,000; owner's equity increases $5,000 
C)  Assets increase $5,000; liabilities increase $5,000; owner's equity, no effect 
D)  Assets increase $5,000; liabilities, no effect; owner's equity decreases $5,000 
E)  Assets decrease $5,000; liabilities, no effect; owner's equity increases $5,000 
A)  Assets increase $5,000; liabilities, no effect; owner's equity increases $5,000 
B)  Assets increase $5,000; liabilities decrease $5,000; owner's equity increases $5,000 
C)  Assets increase $5,000; liabilities increase $5,000; owner's equity, no effect 
D)  Assets increase $5,000; liabilities, no effect; owner's equity decreases $5,000 
E)  Assets decrease $5,000; liabilities, no effect; owner's equity increases $5,000

Question 16

The first step in analyzing a transaction is to determine what accounts are involved.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true?

Accepted Answer

A)  Double-entry accounting requires that each transaction be recorded in at least one account. 
B)  Every transaction is recorded as an increase and/or decrease in two or more accounts. 
C)  Double-entry accounting requires that each transaction be recorded in only two accounts. 
D)  After a transaction has been recorded it is acceptable for the accounting equation to be out of balance. 
A)  Double-entry accounting requires that each transaction be recorded in at least one account. 
B)  Every transaction is recorded as an increase and/or decrease in two or more accounts. 
C)  Double-entry accounting requires that each transaction be recorded in only two accounts. 
D)  After a transaction has been recorded it is acceptable for the accounting equation to be out of balance.

Question 18

Bendada deposited $25,000 in a bank account in the name of the business. Which of the following is true in regards to the fundamental accounting equation?

Accepted Answer

A)  Assets increase by $25,000. 
B)  Liabilities increase by $25,000. 
C)  Assets decrease by $25,000. 
D)  Owner's Equity decreases by $25,000. 
E)  Liabilities decrease by $25,000. 
A)  Assets increase by $25,000. 
B)  Liabilities increase by $25,000. 
C)  Assets decrease by $25,000. 
D)  Owner's Equity decreases by $25,000. 
E)  Liabilities decrease by $25,000.

Question 19

Palmer Hand Clinic has the following accounts and balances: 
Cash, $2,350
Accounts Receivable, $280
Professional Equipment, $1,200
Office Equipment, $6,700
Accounts Payable, $4,380
P.Palmer, Capital, $2,000
Income from Services, $6,000
Rent Expense, $1,850
What is the amount of owner's equity?

Accepted Answer

A)  $6,150 
B)  $2,000 
C)  $8,000 
D)  $4,150 
A)  $6,150 
B)  $2,000 
C)  $8,000 
D)  $4,150

Question 20

Prepaid Insurance is a(n)

Accepted Answer

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

Expenses are recorded

If an owner invests his or her computer, printer, and cash in the business, there is an increase in:

An exchange of assets has no effect on the totals of the accounting equation.

D. Hoffman withdrew $20,000 for personal use from his business. This transaction should be recorded as a(n):

Which of the following is an example of an asset?

A business received $600 cash from charge customers to apply on account. The effect of the transaction is an increase in an asset and a(n)

Accounts Receivable is a(n)

The effect of expenses on the fundamental accounting equation is a(n)

The expanded accounting equation is

The purchase of an asset (like Equipment) on account will

Expenses incurred by a business results in:

Which of the following equations is the fundamental accounting equation?

Accounts Payable is a(n)

Match the terms below with the correct definitions. -Assets minus liabilities

The owner of a business invested $5,000 in the business. What are the effects on the fundamental accounting equation?

The first step in analyzing a transaction is to determine what accounts are involved.

Which of the following is true?

Bendada deposited $25,000 in a bank account in the name of the business. Which of the following is true in regards to the fundamental accounting equation?

Palmer Hand Clinic has the following accounts and balances: Cash, $2,350 Accounts Receivable, $280 Professional Equipment, $1,200 Office Equipment, $6,700 Accounts Payable, $4,380 P.Palmer, Capital, $2,000 Income from Services, $6,000 Rent Expense, $1,850 What is the amount of owner's equity?

Prepaid Insurance is a(n)

T Accounts, Debits and Credits, Trial Balance, and Financial Statements

The General Journal and the General Ledger

Adjusting Entries and the Work Sheet

Closing Entries and the Post-Closing Trial Balance

Bank Accounts, Cash Funds, and Internal Controls

Employee Earnings and Deductions

Employer Taxes, Payments, and Reports

Sales and Purchases

Cash Receipts and Cash Payments

Work Sheet and Adjusting Entries

Financial Statements, Closing Entries, and Reversing Entries

Methods of Depreciation

Bad Debts

Inventory Methods

Notes Receivablenotes Payable

Filters

Exam 1: Asset, Liability, Owners Equity, Revenue, and Expense Accounts

Expenses are recorded

If an owner invests his or her computer, printer, and cash in the business, there is an increase in:

An exchange of assets has no effect on the totals of the accounting equation.

D. Hoffman withdrew $20,000 for personal use from his business. This transaction should be recorded as a(n):

Which of the following is an example of an asset?

A business received $600 cash from charge customers to apply on account. The effect of the transaction is an increase in an asset and a(n)

Accounts Receivable is a(n)

The effect of expenses on the fundamental accounting equation is a(n)

The expanded accounting equation is

The purchase of an asset (like Equipment) on account will

Expenses incurred by a business results in:

Which of the following equations is the fundamental accounting equation?

Accounts Payable is a(n)

Match the terms below with the correct definitions. -Assets minus liabilities

The owner of a business invested $5,000 in the business. What are the effects on the fundamental accounting equation?

The first step in analyzing a transaction is to determine what accounts are involved.

Which of the following is true?

Bendada deposited $25,000 in a bank account in the name of the business. Which of the following is true in regards to the fundamental accounting equation?

Palmer Hand Clinic has the following accounts and balances: Cash, $2,350 Accounts Receivable, $280 Professional Equipment, $1,200 Office Equipment, $6,700 Accounts Payable, $4,380 P.Palmer, Capital, $2,000 Income from Services, $6,000 Rent Expense, $1,850 What is the amount of owner's equity?

Prepaid Insurance is a(n)

T Accounts, Debits and Credits, Trial Balance, and Financial Statements

The General Journal and the General Ledger

Adjusting Entries and the Work Sheet

Closing Entries and the Post-Closing Trial Balance

Bank Accounts, Cash Funds, and Internal Controls

Employee Earnings and Deductions

Employer Taxes, Payments, and Reports

Sales and Purchases

Cash Receipts and Cash Payments

Work Sheet and Adjusting Entries

Financial Statements, Closing Entries, and Reversing Entries

Methods of Depreciation

Bad Debts

Inventory Methods

Notes Receivablenotes Payable

Filters