Question 1

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. D

Question 2

An example of an asset is

Accepted Answer

A) Accounts Receivable 
B) Accounts Payable 
C) Capital 
D) Revenue 
A) Accounts Receivable 
B) Accounts Payable 
C) Capital 
D) Revenue A

Question 3

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. D

Question 4

The fundamental accounting equation would remain in balance if equal amounts were added to both sides of the equation.

Accepted Answer

A) True 
 B)False

Question 5

93. L. Hamilton established his own business, called Fix-It Yourself. Using the fundamental accounting equation, record the transactions for the month provided below for the business:
   
a.) Owner deposited $5,800 in a bank account in the name of the business.
b.) Company bought equipment, paying cash, $1,500.
c.) L. Hamilton invested personal equipment in the business with fair market value of $3,300.
d.) Company bought supplies on account from a creditor, $750.
e.) Company paid creditor from transaction d, $250.
f.) Owner deposited $1,000 in personal checking account
1.
Record the transactions in columnar form including the following:
*write plus and minus signs,
* show the balance after each transaction to verify
*and 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. 
a.) Owner deposited $5,800 in a bank account in the name of the business.
b.) Company bought equipment, paying cash, $1,500.
c.) L.Hamilton invested personal equipment in the business with fair market value of $3,300.
d.) Company bought supplies on account from a creditor, $750.
e.) Company paid creditor from transaction d, $250.f.) Owner deposited $1,000 in personal checking account

Accepted Answer

The answer of 93. L. Hamilton established his own business,...

Question 6

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 7

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

Accepted Answer

A) True 
 B)False

Question 8

Over a period of time, if total assets increase by $27,000 and total liabilities increase by $7,000, then owner's equity will be increased by

Accepted Answer

A) $7,000. 
B) $34,000. 
C) $27,000. 
D) $20,000. 
E) none of these. 
A) $7,000. 
B) $34,000. 
C) $27,000. 
D) $20,000. 
E) none of these.

Question 9

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 10

When a business pays a creditor on account,

Accepted Answer

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

Question 11

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 12

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 13

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 14

The _____________ is the official list of accounts for the business.

Accepted Answer

A) chart of accounts 
B) account list 
C) account title 
D) fundamental accounting equation 
A) chart of accounts 
B) account list 
C) account title 
D) fundamental accounting equation

Question 15

Prepaid Insurance is a(n)

Accepted Answer

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

Question 16

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 17

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.

Question 18

If an owner invests her computer and printer in the business, there is an increase to

Accepted Answer

A) Cash and Capital. 
B) Computer Equipment and Drawing. 
C) Cash and Drawing. 
D) Computer Equipment and Capital. 
E) Computer Equipment and Cash. 
A) Cash and Capital. 
B) Computer Equipment and Drawing. 
C) Cash and Drawing. 
D) Computer Equipment and Capital. 
E) Computer Equipment and Cash.

Question 19

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 20

What is the fundamental accounting equation, including examples of each item of the equation?

Accepted Answer

The answer of What is the fundamental accounting equation, including...

An example of a liability is

An example of an asset is

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

The fundamental accounting equation would remain in balance if equal amounts were added to both sides of the equation.

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

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

Over a period of time, if total assets increase by $27,000 and total liabilities increase by $7,000, then owner's equity will be increased by

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

When a business pays a creditor on account,

The owner of a business invested $5,000 in the business. 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.

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

The _____________ is the official list of accounts for the business.

Prepaid Insurance is a(n)

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

Expenses are recorded

If an owner invests her computer and printer in the business, there is an increase to

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

What is the fundamental accounting equation, including examples of each item of the equation?

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 Including Appendix

Bank Accounts and Cash Funds

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

Filters

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

An example of a liability is

An example of an asset is

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

The fundamental accounting equation would remain in balance if equal amounts were added to both sides of the equation.

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

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

Over a period of time, if total assets increase by $27,000 and total liabilities increase by $7,000, then owner's equity will be increased by

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

When a business pays a creditor on account,

The owner of a business invested $5,000 in the business. 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.

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

The _____________ is the official list of accounts for the business.

Prepaid Insurance is a(n)

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

Expenses are recorded

If an owner invests her computer and printer in the business, there is an increase to

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

What is the fundamental accounting equation, including examples of each item of the equation?

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 Including Appendix

Bank Accounts and Cash Funds

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

Filters