Question 1

Assets are things of value owned by a business entity.

Accepted Answer

A) True 
 B)False

Question 2

When a business receives cash, it is always recorded as an increase to Cash and a decrease to an Expense.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a form of revenue?

Accepted Answer

A)  A check paying a mortgage 
B)  A credit purchase invoice 
C)  Credit sales to charge customers 
D)  A cash purchase invoice 
E)  A check paying utilities 
A)  A check paying a mortgage 
B)  A credit purchase invoice 
C)  Credit sales to charge customers 
D)  A cash purchase invoice 
E)  A check paying utilities

Question 4

Michael has $120,000 invested in his business. The business owes creditors $20,000. Determine the amount of assets in the business.

Accepted Answer

A)  $140,000 
B)  $120,000 
C)  $100,000 
D)  $20,000 
A)  $140,000 
B)  $120,000 
C)  $100,000 
D)  $20,000

Question 5

J. Scott established his own business, called Live Long Medicos. Using the fundamental accounting equation, record the transactions provided below:

$$\begin{array} { | c | c | c | c | c | c | } 
\hline \text { Assets } & = & \text { Liabilities } & + & \text { Owners Equity } & \text { Accounts Used } \
\hline
\end{array}$$ 
a) Owner deposited $15,000 in a bank account in the name of the business.
b) Company bought equipment worth $3,250, paying cash.
c) J. Scott invested personal equipment with fair market value of $5,400 in the business.
d) Company bought supplies worth $1,250 on account from a creditor.
e) Company paid $750 to the creditor from transaction
d.
f) Owner paid $1,000 for personal expenses.
Instructions:
 
1.Record the transactions in columnar form, write plus and minus signs, and show the balance after each transaction to be sure that the equation remains in balance. List the account titles needed to record each transaction.
2.Write the proof of totals at the bottom to show that one side of the equation equals the other side.

Accepted Answer

The answer of J. Scott established his own business, called...

Question 6

Jerry Frost invested equipment in his business having a fair market value of $23,500. What are the effects on the fundamental accounting equation?

Accepted Answer

A)  Assets increase $23,500; liabilities, no effect; owner's equity increases $23,500. 
B)  Assets increase $23,500; liabilities decrease $23,500; owner's equity increases $23,500. 
C)  Assets increase $23,500; liabilities increase $23,500; owner's equity, no effect. 
D)  Assets decrease $23,500; liabilities, no effect; owner's equity decreases $23,500. 
E)  Assets decrease $23,500; liabilities, no effect; owner's equity increases $23,500. 
A)  Assets increase $23,500; liabilities, no effect; owner's equity increases $23,500. 
B)  Assets increase $23,500; liabilities decrease $23,500; owner's equity increases $23,500. 
C)  Assets increase $23,500; liabilities increase $23,500; owner's equity, no effect. 
D)  Assets decrease $23,500; liabilities, no effect; owner's equity decreases $23,500. 
E)  Assets decrease $23,500; liabilities, no effect; owner's equity increases $23,500.

Question 7

A(n) ______________ is money paid directly to the owner.

Accepted Answer

A)  expense 
B)  capital investment 
C)  withdrawal 
D)  none of the answers listed 
A)  expense 
B)  capital investment 
C)  withdrawal 
D)  none of the answers listed

Question 8

The liability account ______________ is used for short-term liabilities or charge accounts, usually due within 30 days.

Accepted Answer

A)  Short-term Payable 
B)  Liability Payable 
C)  Accounts Payable 
D)  Accounts Receivable 
A)  Short-term Payable 
B)  Liability Payable 
C)  Accounts Payable 
D)  Accounts Receivable

Question 9

The owner's right, claim, or financial interest is referred to as

Accepted Answer

A)  assets. 
B)  business entity. 
C)  equity. 
D)  revenues. 
A)  assets. 
B)  business entity. 
C)  equity. 
D)  revenues.

Question 10

Wages Expense is a(n)

Accepted Answer

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

Question 11

The borrowing of money will

Accepted Answer

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

Question 12

Newton Company bought equipment, paying cash, $25,000. Which of the following is true in regards to the fundamental accounting equation?

Accepted Answer

A)  Total assets increased by $25,000. 
B)  Total liabilities increased by $25,000. 
C)  Total liabilities decreased by $25,000. 
D)  Total Owner's Equity increased by $25,000. 
E)  Total assets are unaffected. 
A)  Total assets increased by $25,000. 
B)  Total liabilities increased by $25,000. 
C)  Total liabilities decreased by $25,000. 
D)  Total Owner's Equity increased by $25,000. 
E)  Total assets are unaffected.

Question 13

Explain the separate entity concept, including why it is important to accounting.

Accepted Answer

This concept means that a busi

Question 14

The purchase of supplies for cash will

Accepted Answer

A)  increase Supplies and decrease Cash. 
B)  increase Supplies Expense and decrease Cash. 
C)  decrease Cash and increase Accounts Payable. 
D)  increase Supplies Expense and increase Accounts Payable. 
E)  decrease Cash and increase Capital. 
A)  increase Supplies and decrease Cash. 
B)  increase Supplies Expense and decrease Cash. 
C)  decrease Cash and increase Accounts Payable. 
D)  increase Supplies Expense and increase Accounts Payable. 
E)  decrease Cash and increase Capital.

Question 15

Newton Company purchases equipment on account. What are the effects on the fundamental accounting equation?

Accepted Answer

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

Question 16

Pidcoke Company sold services on account, $23,000. This transactions should be recorded as a(n)

Accepted Answer

A)  increase to cash. 
B)  decrease to revenue. 
C)  increase to accounts receivable. 
D)  increase to accounts payable. 
A)  increase to cash. 
B)  decrease to revenue. 
C)  increase to accounts receivable. 
D)  increase to accounts payable.

Question 17

Which of the following represents the costs that relate to earning revenue?

Accepted Answer

A)  Owner's Equity 
B)  Expenses 
C)  Drawing 
D)  Assets 
A)  Owner's Equity 
B)  Expenses 
C)  Drawing 
D)  Assets

Question 18

The account ____________ is used to record amounts due from charge customers.

Accepted Answer

A)  cash 
B)  accounts payable 
C)  accounts receivable 
D)  revenue 
A)  cash 
B)  accounts payable 
C)  accounts receivable 
D)  revenue

Question 19

Match the terms below with the correct definitions.
-A business enterprise, separate and distinct from the person who supplies its assets (economic unit in itself)

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 20

The owner's Drawing account is listed with the other expenses of a business.

Accepted Answer

A) True 
 B)False

Assets are things of value owned by a business entity.

When a business receives cash, it is always recorded as an increase to Cash and a decrease to an Expense.

Which of the following is a form of revenue?

Michael has $120,000 invested in his business. The business owes creditors $20,000. Determine the amount of assets in the business.

Jerry Frost invested equipment in his business having a fair market value of $23,500. What are the effects on the fundamental accounting equation?

A(n) ______________ is money paid directly to the owner.

The liability account ______________ is used for short-term liabilities or charge accounts, usually due within 30 days.

The owner's right, claim, or financial interest is referred to as

Wages Expense is a(n)

The borrowing of money will

Newton Company bought equipment, paying cash, $25,000. Which of the following is true in regards to the fundamental accounting equation?

Explain the separate entity concept, including why it is important to accounting.

The purchase of supplies for cash will

Newton Company purchases equipment on account. What are the effects on the fundamental accounting equation?

Pidcoke Company sold services on account, $23,000. This transactions should be recorded as a(n)

Which of the following represents the costs that relate to earning revenue?

The account ____________ is used to record amounts due from charge customers.

Match the terms below with the correct definitions. -A business enterprise, separate and distinct from the person who supplies its assets (economic unit in itself)

The owner's Drawing account is listed with the other expenses of a business.

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

Assets are things of value owned by a business entity.

When a business receives cash, it is always recorded as an increase to Cash and a decrease to an Expense.

Which of the following is a form of revenue?

Michael has $120,000 invested in his business. The business owes creditors $20,000. Determine the amount of assets in the business.

Jerry Frost invested equipment in his business having a fair market value of $23,500. What are the effects on the fundamental accounting equation?

A(n) ______________ is money paid directly to the owner.

The liability account ______________ is used for short-term liabilities or charge accounts, usually due within 30 days.

The owner's right, claim, or financial interest is referred to as

Wages Expense is a(n)

The borrowing of money will

Newton Company bought equipment, paying cash, $25,000. Which of the following is true in regards to the fundamental accounting equation?

Explain the separate entity concept, including why it is important to accounting.

The purchase of supplies for cash will

Newton Company purchases equipment on account. What are the effects on the fundamental accounting equation?

Pidcoke Company sold services on account, $23,000. This transactions should be recorded as a(n)

Which of the following represents the costs that relate to earning revenue?

The account ____________ is used to record amounts due from charge customers.

Match the terms below with the correct definitions. -A business enterprise, separate and distinct from the person who supplies its assets (economic unit in itself)

The owner's Drawing account is listed with the other expenses of a business.

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