Question 1

The statement of owner's equity is the link between the income statement and balance sheet.

Accepted Answer

A) True 
 B)False

Question 2

Cash withdrawals by the owner increase both equity and assets.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following transactions would cause one asset to decrease and another asset to increase?

Accepted Answer

A) The business provided services to a cash customer. 
B) The business bought supplies for cash. 
C) The owner withdrew cash from the business. 
D) The business bought supplies on account. 
A) The business provided services to a cash customer. 
B) The business bought supplies for cash. 
C) The owner withdrew cash from the business. 
D) The business bought supplies on account.

Question 4

Withdrawals are business expenses that are included on the income statement.

Accepted Answer

A) True 
 B)False

Question 5

Ryan withdrew cash from the business to pay his personal cell phone bill.The expanded accounting equation changes include:

Accepted Answer

A) increase in both Cash and Withdrawals. 
B) decrease in both Cash and Withdrawals. 
C) decrease in Cash and increase in Withdrawals. 
D) increase in Cash and decrease in Withdrawals. 
A) increase in both Cash and Withdrawals. 
B) decrease in both Cash and Withdrawals. 
C) decrease in Cash and increase in Withdrawals. 
D) increase in Cash and decrease in Withdrawals.

Question 6

Victoria received $200 from customers in partial payment for accounting services performed previously.The recording of this transaction would:

Accepted Answer

A) increase Cash and Victoria's Capital $200. 
B) increase Cash and decrease Accounts Receivable $200. 
C) increase Cash and increase Accounts Receivable $200. 
D) decrease Accounts Receivable and increase Victoria's Capital $200. 
A) increase Cash and Victoria's Capital $200. 
B) increase Cash and decrease Accounts Receivable $200. 
C) increase Cash and increase Accounts Receivable $200. 
D) decrease Accounts Receivable and increase Victoria's Capital $200.

Question 7

Record the following transactions into the expanded accounting equation for the Mayoras' Law Firm.Note that all titles have beginning balances.(You will need to determine the beginning capital balance. )
a.Provided legal services for cash,$1,200
b.Billed customers for services rendered,$2,000
c.Received and paid the monthly utility bill,$300
d.Collected $500 on account from customers
e.Paid supplies expense,$250
f.Withdrew $200 cash for personal use

Accepted Answer

The answer of Record the following transactions into the expanded...

Question 8

Eileen's Corner Shoppe purchases a desk for cash.This causes:

Accepted Answer

A) Cash and Capital to increase. 
B) Furniture and Cash to increase. 
C) Furniture to increase and Cash to decrease. 
D) Accounts Payable to increase and Capital to increase. 
A) Cash and Capital to increase. 
B) Furniture and Cash to increase. 
C) Furniture to increase and Cash to decrease. 
D) Accounts Payable to increase and Capital to increase.

Question 9

Legal services were provided to a credit customer.How would this affect the accounting equation?

Accepted Answer

A) Cash and Accounts Receivable increase. 
B) Accounts Payable decreased and Capital decreased. 
C) Accounts Receivable and Revenue increase. 
D) None of the above is correct. 
A) Cash and Accounts Receivable increase. 
B) Accounts Payable decreased and Capital decreased. 
C) Accounts Receivable and Revenue increase. 
D) None of the above is correct.

Question 10

A sole proprietorship ends with the death of the owner.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following transactions would cause one asset to increase and another asset to decrease?

Accepted Answer

A) The owner invested cash in the business. 
B) The business paid a creditor. 
C) The business incurred an expense on credit. 
D) The business bought supplies for cash. 
A) The owner invested cash in the business. 
B) The business paid a creditor. 
C) The business incurred an expense on credit. 
D) The business bought supplies for cash.

Question 12

A revenue should be recorded when:

Accepted Answer

A) it is earned. 
B) payment is received. 
C) the invoice is sent to the customer. 
D) All of the above are correct. 
A) it is earned. 
B) payment is received. 
C) the invoice is sent to the customer. 
D) All of the above are correct.

Question 13

The purchase of equipment with both cash and on account was recorded as only a credit purchase.Due to this error:

Accepted Answer

A) assets would be understated. 
B) liabilities would be overstated. 
C) owner's equity would be overstated. 
D) None of the above is correct. 
A) assets would be understated. 
B) liabilities would be overstated. 
C) owner's equity would be overstated. 
D) None of the above is correct.

Question 14

Boxes R' Us paid $5,000 in salaries and wages for February.This transaction will:

Accepted Answer

A) increase expenses and decrease revenue. 
B) increase expenses and increase liabilities. 
C) decrease assets and increase expenses. 
D) Increase assets and expenses. 
A) increase expenses and decrease revenue. 
B) increase expenses and increase liabilities. 
C) decrease assets and increase expenses. 
D) Increase assets and expenses.

Question 15

Statement of owner's equity shows the change in capital.

Accepted Answer

A) True 
 B)False

Question 16

The purpose of the accounting process is to provide financial information about:

Accepted Answer

A) sole proprietorships. 
B) small businesses. 
C) large corporations. 
D) All of these answers are correct. 
A) sole proprietorships. 
B) small businesses. 
C) large corporations. 
D) All of these answers are correct.

Question 17

Which accounts are affected when the company pays salaries?

Accepted Answer

A) Assets and Capital 
B) Liabilities and revenue 
C) Assets and Expenses 
D) None of the above is correct. 
A) Assets and Capital 
B) Liabilities and revenue 
C) Assets and Expenses 
D) None of the above is correct.

Question 18

The income statement is completed after the statement of owners equity.

Accepted Answer

A) True 
 B)False

Question 19

A law firm would be considered a:

Accepted Answer

A) merchandise company. 
B) manufacturer. 
C) service company. 
D) None of the above is correct. 
A) merchandise company. 
B) manufacturer. 
C) service company. 
D) None of the above is correct.

Question 20

Strum Hardware has total assets of $60,000.What are the total assets if new equipment is purchased for $5,000 cash?

Accepted Answer

A) $45,000 
B) $50,000 
C) $55,000 
D) $60,000 
A) $45,000 
B) $50,000 
C) $55,000 
D) $60,000

Exam 1: Accounting Concepts and Procedures

The statement of owner's equity is the link between the income statement and balance sheet.

Cash withdrawals by the owner increase both equity and assets.

Which of the following transactions would cause one asset to decrease and another asset to increase?

Withdrawals are business expenses that are included on the income statement.

Ryan withdrew cash from the business to pay his personal cell phone bill.The expanded accounting equation changes include:

Victoria received $200 from customers in partial payment for accounting services performed previously.The recording of this transaction would:

Eileen's Corner Shoppe purchases a desk for cash.This causes:

Legal services were provided to a credit customer.How would this affect the accounting equation?

A sole proprietorship ends with the death of the owner.

Which of the following transactions would cause one asset to increase and another asset to decrease?

A revenue should be recorded when:

The purchase of equipment with both cash and on account was recorded as only a credit purchase.Due to this error:

Boxes R' Us paid $5,000 in salaries and wages for February.This transaction will:

Statement of owner's equity shows the change in capital.

The purpose of the accounting process is to provide financial information about:

Which accounts are affected when the company pays salaries?

The income statement is completed after the statement of owners equity.

A law firm would be considered a:

Strum Hardware has total assets of $60,000.What are the total assets if new equipment is purchased for $5,000 cash?

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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