Question 1

What is the difference between Bookkeeping and Accounting?

Accepted Answer

Bookkeeping is the recording function within the accounting process.A bookkeeper records the transactions into the company's books (more transactional)while an accountant reviews and analyzes the information that is recorded.The accountant then takes the information and prepares the financial statements.

Question 2

Which of the following is a characteristic of a sole proprietorship?

Accepted Answer

A) Business owned by more than one person 
B) Easy to form 
C) Each stockholder acts as an owner of the company 
D) Can continue indefinitely 
A) Business owned by more than one person 
B) Easy to form 
C) Each stockholder acts as an owner of the company 
D) Can continue indefinitely B

Question 3

If total assets are $50,000 and total liabilities are $22,000,Capital must equal:

Accepted Answer

A) $28,000. 
B) $18,000. 
C) $8,000. 
D) $20,000. 
A) $28,000. 
B) $18,000. 
C) $8,000. 
D) $20,000. A

Question 4

A partnership is a business which is:

Accepted Answer

A) easy to form. 
B) ends with the death of a partner. 
C) owned by more than one person. 
D) All of these answers are correct. 
A) easy to form. 
B) ends with the death of a partner. 
C) owned by more than one person. 
D) All of these answers are correct.

Question 5

Mary withdrew 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) Decrease 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) Decrease an asset and decrease owner's equity

Question 6

Assets are equal to:

Accepted Answer

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

Question 7

Which of the following will decrease owner's equity?

Accepted Answer

A) An exchange of assets 
B) The purchase of an asset on credit 
C) An investment by the owner 
D) A withdrawal by the owner 
A) An exchange of assets 
B) The purchase of an asset on credit 
C) An investment by the owner 
D) A withdrawal by the owner

Question 8

Accounts Receivable results from earning revenue on account.

Accepted Answer

A) True 
 B)False

Question 9

Items owned by the business such as land,supplies and equipment are:

Accepted Answer

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

Question 10

Harvest Moon Company has total assets of $20,000.If $2,000 cash is used to purchase a new computer,the total assets would be:

Accepted Answer

A) $20,000. 
B) $18,000. 
C) $22,000. 
D) $2,000. 
A) $20,000. 
B) $18,000. 
C) $22,000. 
D) $2,000.

Question 11

Prepare the financial statements for H.Logan of Logan Motorcycles from the following account balances: 1)an income statement,2)a statement of owner's equity,and 3)a balance sheet for the month ended October 31,200x.You will need to calculate the value of the Accounts Payable account (note: remember the basic accounting equation).
 $$\begin{array} { l r } 
\text { Cash } & \$ 1,300 \
\text { Accounts Receivable } & 500 \
\text { Equipment } & 2,000 \
\text { Accounts Payable } & ? ? ? \
\text { Travis, Capital } & 3,000 \
\text { Revenue } & 1,000 \
\text { Expenses } & 700 \
\text { Travis, Withdrawal } & 100
\end{array}$$

Accepted Answer

The answer of Prepare the financial statements for H.Logan of...

Question 12

Expenses:

Accepted Answer

A) are costs the company incurs in carrying on operations. 
B) are a subdivision of owner's equity. 
C) record personal expenses not related to the business. 
D) Both A and B are correct. 
A) are costs the company incurs in carrying on operations. 
B) are a subdivision of owner's equity. 
C) record personal expenses not related to the business. 
D) Both A and B are correct.

Question 13

The left side of the accounting equation shows what is owned by the business.

Accepted Answer

A) True 
 B)False

Question 14

Owner's withdrawals:

Accepted Answer

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

Question 15

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 16

The balance sheet contains:

Accepted Answer

A) liabilities,expenses and capital. 
B) assets,liabilities and revenues. 
C) expenses,assets and cash. 
D) None of the above is correct. 
A) liabilities,expenses and capital. 
B) assets,liabilities and revenues. 
C) expenses,assets and cash. 
D) None of the above is correct.

Question 17

Which financial statement is prepared first?

Accepted Answer

A) Statement of Owner's Equity 
B) Balance Sheet 
C) Income Statement 
D) None of the above 
A) Statement of Owner's Equity 
B) Balance Sheet 
C) Income Statement 
D) None of the above

Question 18

Revenue and cash will always be the same amount.

Accepted Answer

A) True 
 B)False

Question 19

The financial statement that shows revenue and expenses for a period of time is the:

Accepted Answer

A) balance sheet. 
B) income statement. 
C) statement of owner's equity. 
D) statement of cash flows. 
A) balance sheet. 
B) income statement. 
C) statement of owner's equity. 
D) statement of cash flows.

Question 20

The Sarbanes-Oxley Act was passed to:

Accepted Answer

A) prevent fraud at public companies. 
B) replace all of the old accounting procedures with new ones. 
C) improve the accuracy of the company's financial reporting. 
D) Both A and C are correct. 
A) prevent fraud at public companies. 
B) replace all of the old accounting procedures with new ones. 
C) improve the accuracy of the company's financial reporting. 
D) Both A and C are correct.

Exam 1: Accounting Concepts and Procedures

What is the difference between Bookkeeping and Accounting?

Which of the following is a characteristic of a sole proprietorship?

If total assets are $50,000 and total liabilities are $22,000,Capital must equal:

A partnership is a business which is:

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

Assets are equal to:

Which of the following will decrease owner's equity?

Accounts Receivable results from earning revenue on account.

Items owned by the business such as land,supplies and equipment are:

Harvest Moon Company has total assets of $20,000.If $2,000 cash is used to purchase a new computer,the total assets would be:

Expenses:

The left side of the accounting equation shows what is owned by the business.

Owner's withdrawals:

The claims of creditors against the assets are:

The balance sheet contains:

Which financial statement is prepared first?

Revenue and cash will always be the same amount.

The financial statement that shows revenue and expenses for a period of time is the:

The Sarbanes-Oxley Act was passed to:

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:

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,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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