Question 1

Otto Company paid a credit on account, $1,500. Which of the following is true in regards to the fundamental accounting equation?

Accepted Answer

A)  Assets increased by $1,500. 
B)  Liabilities increased by $1,500. 
C)  Liabilities decreased by $1,500. 
D)  Owner's equity increased by $1,500. 
E)  Owner's equity decreased by $1,500. 
A)  Assets increased by $1,500. 
B)  Liabilities increased by $1,500. 
C)  Liabilities decreased by $1,500. 
D)  Owner's equity increased by $1,500. 
E)  Owner's equity decreased by $1,500.

Question 2

Match the terms below with the correct definitions.
-Represents amount owed by charge customers

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 3

When the rent for the business is paid with a check,

Accepted Answer

A)  Cash is decreased and Rent Expense is decreased. 
B)  Cash is decreased and Rent Income is increased. 
C)  Cash is decreased and Rent Expense is increased. 
D)  Cash is decreased and Accounts Payable is decreased. 
E)  Cash is increased and Rent Expense is decreased. 
A)  Cash is decreased and Rent Expense is decreased. 
B)  Cash is decreased and Rent Income is increased. 
C)  Cash is decreased and Rent Expense is increased. 
D)  Cash is decreased and Accounts Payable is decreased. 
E)  Cash is increased and Rent Expense is decreased.

Question 4

The purchase of office equipment on account would involve a(n)

Accepted Answer

A)  increasing an asset and increasing a liability. 
B)  decreasing an asset and increasing an asset. 
C)  decreasing an asset and increasing an expense. 
D)  increasing an asset and increasing an expense. 
A)  increasing an asset and increasing a liability. 
B)  decreasing an asset and increasing an asset. 
C)  decreasing an asset and increasing an expense. 
D)  increasing an asset and increasing an expense.

Question 5

Petkus Company paid Perkins Products, a creditor, on account, $7,500. What are the effects on the fundamental account equation?

Accepted Answer

A)  Assets increase $7,500; liabilities, no effect; owner's equity increases $7,500. 
B)  Assets decrease $7,500; liabilities, no effect; owner's equity decreases $7,500. 
C)  Assets increase $7,500; liabilities decrease $7,500; owner's equity, no effect. 
D)  Assets decrease $7,500; liabilities decrease $7,500; owner's equity, no effect. 
E)  Assets decrease $7,500; liabilities increase $7,500; owner's equity, no effect. 
A)  Assets increase $7,500; liabilities, no effect; owner's equity increases $7,500. 
B)  Assets decrease $7,500; liabilities, no effect; owner's equity decreases $7,500. 
C)  Assets increase $7,500; liabilities decrease $7,500; owner's equity, no effect. 
D)  Assets decrease $7,500; liabilities decrease $7,500; owner's equity, no effect. 
E)  Assets decrease $7,500; liabilities increase $7,500; owner's equity, no effect.

Question 6

Match the terms below with the correct definitions.
-Costs that relate to the earning of revenue

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 7

Liabilities represent amounts owed to creditors.

Accepted Answer

A) True 
 B)False

Question 8

Harry Dental Clinic has the following accounts and balances:
 Cash, $2,000
Accounts Receivable, $1,250
Professional Equipment, $10,200
Office Equipment, $5,500
Accounts Payable, $3,500
P. Palmer, Capital, $10,000
P. Palmer, Drawing, $1,000
Professional fee earned, $18,000
Rent Expense, $12,350
Wage Expense, $1,200
What is the amount of assets in the accounting equation?

Accepted Answer

A)  $10,250 
B)  $12,350 
C)  $18,950 
D)  $16,530 
A)  $10,250 
B)  $12,350 
C)  $18,950 
D)  $16,530

Question 9

The _____________ means that a business is separated from its owners.

Accepted Answer

A)  stand-alone entity concept 
B)  equity concept 
C)  separate entity concept 
D)  fair value concept 
E)  none of the answers listed 
A)  stand-alone entity concept 
B)  equity concept 
C)  separate entity concept 
D)  fair value concept 
E)  none of the answers listed

Question 10

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

Accepted Answer

A)  Assets increase; liabilities, no effect; owner's equity increases. 
B)  Assets decrease; liabilities, no effect; owner's equity increases. 
C)  Assets increase; liabilities, no effect; owner's equity decreases. 
D)  Assets increase; liabilities, increase; owner's equity, no effect. 
A)  Assets increase; liabilities, no effect; owner's equity increases. 
B)  Assets decrease; liabilities, no effect; owner's equity increases. 
C)  Assets increase; liabilities, no effect; owner's equity decreases. 
D)  Assets increase; liabilities, increase; owner's equity, no effect.

Question 11

Match between columns
                        Premises:  Costs that relate to the earning of revenue
 Assets minus liabilities
 Represents amount owed by charge customers
 One to whom money is owed
 A business enterprise, separate and distinct from the person who supplies its assets (economic unit in itself)
Something a company owns of value
 Categories under the main headings Assets, Liabilities, Owner's Equity
 Company's asset account from which bills are paid
 Expresses the relationship between assets, liabilities, and owner's equity

Accepted Answer

The Answer of Creditor and Fundamental accounting equation and Expenses is...

Question 12

Accounts Receivable is considered an asset.

Accepted Answer

A) True 
 B)False

Question 13

When a company receives cash on account from a credit customer, the company should record a(n)

Accepted Answer

A)  increase to Accounts Receivable. 
B)  decrease to Cash. 
C)  increase to Revenue. 
D)  decrease to Accounts Receivable. 
A)  increase to Accounts Receivable. 
B)  decrease to Cash. 
C)  increase to Revenue. 
D)  decrease to Accounts Receivable.

Question 14

Match the terms below with the correct definitions.
-Categories under the main headings Assets, Liabilities, Owner's Equity

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

Jamie's Lighting Company paid rent for the month, $2,500. What are the effects on the fundamental accounting equation?

Accepted Answer

A)  Assets increase $2,500; liabilities, no effect; owner's equity increases $2,500. 
B)  Assets decrease $2,500; liabilities, no effect; owner's equity increases $2,500. 
C)  Assets decrease $2,500; liabilities, decrease $2,500; owner's equity, no effect. 
D)  Assets decrease $2,500; liabilities, no effect; owner's equity decreases $2,500. 
A)  Assets increase $2,500; liabilities, no effect; owner's equity increases $2,500. 
B)  Assets decrease $2,500; liabilities, no effect; owner's equity increases $2,500. 
C)  Assets decrease $2,500; liabilities, decrease $2,500; owner's equity, no effect. 
D)  Assets decrease $2,500; liabilities, no effect; owner's equity decreases $2,500.

Question 16

Double-entry accounting means that, for each transaction, an amount must be added to or subtracted from each side of the equation.

Accepted Answer

A) True 
 B)False

Question 17

Every transaction is recorded in terms of increases and/or decreases in two or more accounts.

Accepted Answer

A) True 
 B)False

Question 18

An example of a liability is

Accepted Answer

A)  Cash. 
B)  Prepaid Insurance. 
C)  Rent Expense. 
D)  Accounts Payable. 
A)  Cash. 
B)  Prepaid Insurance. 
C)  Rent Expense. 
D)  Accounts Payable.

Question 19

When an owner withdraws cash from the business, it results in a decrease in:

Accepted Answer

A)  Cash and Accounts Receivable. 
B)  Cash and Contingent Liabilities. 
C)  Cash and Capital. 
D)  Cash and Accounts Payable. 
E)  Cash and Long-term Liabilities. 
A)  Cash and Accounts Receivable. 
B)  Cash and Contingent Liabilities. 
C)  Cash and Capital. 
D)  Cash and Accounts Payable. 
E)  Cash and Long-term Liabilities.

Question 20

The amounts that the business entity owes its creditors are referred to as

Accepted Answer

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

Otto Company paid a credit on account, $1,500. Which of the following is true in regards to the fundamental accounting equation?

Match the terms below with the correct definitions. -Represents amount owed by charge customers

When the rent for the business is paid with a check,

The purchase of office equipment on account would involve a(n)

Petkus Company paid Perkins Products, a creditor, on account, $7,500. What are the effects on the fundamental account equation?

Match the terms below with the correct definitions. -Costs that relate to the earning of revenue

Liabilities represent amounts owed to creditors.

The _____________ means that a business is separated from its owners.

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

Accounts Receivable is considered an asset.

When a company receives cash on account from a credit customer, the company should record a(n)

Match the terms below with the correct definitions. -Categories under the main headings Assets, Liabilities, Owner's Equity

Jamie's Lighting Company paid rent for the month, $2,500. What are the effects on the fundamental accounting equation?

Double-entry accounting means that, for each transaction, an amount must be added to or subtracted from each side of the equation.

Every transaction is recorded in terms of increases and/or decreases in two or more accounts.

An example of a liability is

When an owner withdraws cash from the business, it results in a decrease in:

The amounts that the business entity owes its creditors are referred to as

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

Otto Company paid a credit on account, $1,500. Which of the following is true in regards to the fundamental accounting equation?

Match the terms below with the correct definitions. -Represents amount owed by charge customers

When the rent for the business is paid with a check,

The purchase of office equipment on account would involve a(n)

Petkus Company paid Perkins Products, a creditor, on account, $7,500. What are the effects on the fundamental account equation?

Match the terms below with the correct definitions. -Costs that relate to the earning of revenue

Liabilities represent amounts owed to creditors.

The _____________ means that a business is separated from its owners.

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

Accounts Receivable is considered an asset.

When a company receives cash on account from a credit customer, the company should record a(n)

Match the terms below with the correct definitions. -Categories under the main headings Assets, Liabilities, Owner's Equity

Jamie's Lighting Company paid rent for the month, $2,500. What are the effects on the fundamental accounting equation?

Double-entry accounting means that, for each transaction, an amount must be added to or subtracted from each side of the equation.

Every transaction is recorded in terms of increases and/or decreases in two or more accounts.

An example of a liability is

When an owner withdraws cash from the business, it results in a decrease in:

The amounts that the business entity owes its creditors are referred to as

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