Question 1

Sue Lee paid $1,200 for her employees' salaries. This transaction would

Accepted Answer

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

Question 2

Match the terms with the definitions.
-Reports beginning capital, plus net income, less withdrawals to compute ending capital.

Accepted Answer

A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity 
A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity

Question 3

The accounting equation may be expressed as assets − liabilities = owner's equity.

Accepted Answer

A) True 
 B)False

Question 4

Match the terms with the definitions.
-Items a business owns that will provide future benefits.

Accepted Answer

A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity 
A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity

Question 5

Any item a business owns that will provide future benefits is called owner's equity.

Accepted Answer

A) True 
 B)False

Question 6

Expenses that are incurred in operating the enterprise increase owner's equity.

Accepted Answer

A) True 
 B)False

Question 7

Meghan started her business by investing $30,000 in cash. This transaction would

Accepted Answer

A)  increase assets and increase owner's equity. 
B)  increase assets and increase liabilities. 
C)  increase one asset and decrease another asset. 
D)  decrease assets and decrease liabilities. 
A)  increase assets and increase owner's equity. 
B)  increase assets and increase liabilities. 
C)  increase one asset and decrease another asset. 
D)  decrease assets and decrease liabilities.

Question 8

An increase in a revenue account may also result in an increase in the accounts receivable account.

Accepted Answer

A) True 
 B)False

Question 9

The income statement and statement of owner's equity provide information covering a period of time.

Accepted Answer

A) True 
 B)False

Question 10

Liabilities represent an "inside" interest in a business.

Accepted Answer

A) True 
 B)False

Question 11

Match the terms with the definitions.
-The decrease in assets (or increase in liabilities) as a result of efforts to produce revenues.

Accepted Answer

A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity 
A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity

Question 12

Match the terms with the definitions.
-An individual, association, or organization that engages in economic activities and controls specific economic resources.

Accepted Answer

A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity 
A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity

Question 13

The financial statement that should be completed first is the

Accepted Answer

A)  balance sheet. 
B)  statement of financial position. 
C)  statement of financial condition. 
D)  income statement. 
A)  balance sheet. 
B)  statement of financial position. 
C)  statement of financial condition. 
D)  income statement.

Question 14

The financial statement that shows the state of the firm's assets, liabilities, and owner's equity on a specific date is called a(n)

Accepted Answer

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

Question 15

Match the terms with the definitions.
-A formal written promise to pay a supplier or lender a specified sum of money at a definite future time.

Accepted Answer

A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity 
A) account 
B) accounts payable 
C) accounts receivable 
D) accounting equation 
E) assets
F)balance sheet
G)business entity
H)business entity concept
I)business transaction
J)drawing
K)expenses
L)income statement
M)liability
N)net income
O)net loss
P)notes payable
Q)owner's equity
R)revenues
S)statement of owner's equity

Question 16

Increases to owner's equity may be from

Accepted Answer

A)  expenses that are incurred. 
B)  expenses exceeding revenue for the period. 
C)  withdrawals of cash from the business by the owner. 
D)  revenue that is derived from sales of goods or services. 
A)  expenses that are incurred. 
B)  expenses exceeding revenue for the period. 
C)  withdrawals of cash from the business by the owner. 
D)  revenue that is derived from sales of goods or services.

Question 17

A business entity is an individual, association, or organization with control over economic resources and which engages in economic activities.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing Transactions: the Accounting Equation

Sue Lee paid $1,200 for her employees' salaries. This transaction would

Match the terms with the definitions. -Reports beginning capital, plus net income, less withdrawals to compute ending capital.

The accounting equation may be expressed as assets − liabilities = owner's equity.

Match the terms with the definitions. -Items a business owns that will provide future benefits.

Any item a business owns that will provide future benefits is called owner's equity.

Expenses that are incurred in operating the enterprise increase owner's equity.

Meghan started her business by investing $30,000 in cash. This transaction would

An increase in a revenue account may also result in an increase in the accounts receivable account.

The income statement and statement of owner's equity provide information covering a period of time.

Liabilities represent an "inside" interest in a business.

Match the terms with the definitions. -The decrease in assets (or increase in liabilities) as a result of efforts to produce revenues.

Match the terms with the definitions. -An individual, association, or organization that engages in economic activities and controls specific economic resources.

The financial statement that should be completed first is the

The financial statement that shows the state of the firm's assets, liabilities, and owner's equity on a specific date is called a(n)

Match the terms with the definitions. -A formal written promise to pay a supplier or lender a specified sum of money at a definite future time.

Increases to owner's equity may be from

A business entity is an individual, association, or organization with control over economic resources and which engages in economic activities.

Introduction to Accounting

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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