Question 1

Match the following business types with each business listed below. Each may be used more than once.
-A health club and spa

Accepted Answer

A) Service business 
B) Manufacturing business 
C) Merchandising business 
A) Service business 
B) Manufacturing business 
C) Merchandising business

Question 2

Michael Anderson is starting a computer programming business and has deposited an initial investment of $15,000 into the business cash account. Identify how the accounting equation will be affected.

Accepted Answer

A)  increase in assets (Cash) and increase in liabilities (Accounts Payable) 
B)  increase in assets (Cash) and increase in owner's equity (Michael Anderson, Capital) 
C)  increase in assets (Accounts Receivable) and decrease in liabilities (Accounts Payable) 
D)  increase in assets (Cash) and increase in assets (Accounts Receivable) 
A)  increase in assets (Cash) and increase in liabilities (Accounts Payable) 
B)  increase in assets (Cash) and increase in owner's equity (Michael Anderson, Capital) 
C)  increase in assets (Accounts Receivable) and decrease in liabilities (Accounts Payable) 
D)  increase in assets (Cash) and increase in assets (Accounts Receivable)

Question 3

If an owner wanted to know how money flowed into and out of the company, which financial statement would the owner use?

Accepted Answer

A)  income statement 
B)  statement of cash flows 
C)  balance sheet 
D)  statement of retained earnings 
A)  income statement 
B)  statement of cash flows 
C)  balance sheet 
D)  statement of retained earnings

Question 4

Identify each of the following as either internal or external users of accounting information. $$\begin{array} { | l | l | } 
\hline \text { A. } & \text { Payroll manager } \
\hline \text { B. } & \text { Bank } \
\hline \text { C. } & \text { President's secretary } \
\hline \text { D. } & \text { Internal Revenue Service } \
\hline \text { E. } & \text { Raw material vendors } \
\hline \text { F. } & \text { Social Security Administration } \
\hline \text { G. } & \text { Health insurance provider } \
\hline \text { H. } & \text { Managerial accountant } \
\hline
\end{array}$$

Accepted Answer

The answer of Identify each of the following as either...

Question 5

Indicate whether each of the following accounts represents an asset, liability, or owner's equity:
(a)Accounts Payable
(b)Wages Expense
(c)Capital
(d)Accounts Receivable
(e)Withdrawal
(f)Land

Accepted Answer

(a)liability
(b)owne

Question 6

Land originally purchased for $30,000 is sold for $62,000 in cash. What is the effect of the sale on the accounting equation?

Accepted Answer

A)  assets increase by $62,000; owner's equity increases by $62,000 
B)  assets increase by $32,000; owner's equity increases by $32,000 
C)  assets increase by $62,000; liabilities decrease by $30,000; owner's equity increases by $32,000 
D)  assets increase by $30,000; no change in liabilities; owner's equity increases by $62,000 
A)  assets increase by $62,000; owner's equity increases by $62,000 
B)  assets increase by $32,000; owner's equity increases by $32,000 
C)  assets increase by $62,000; liabilities decrease by $30,000; owner's equity increases by $32,000 
D)  assets increase by $30,000; no change in liabilities; owner's equity increases by $62,000

Question 7

Using the following accounting equation elements and their balances, prepare, in good form, an income statement for Heavenly Futures Company for the month ended August 31.? $$\begin{array} { l r } 
\text { Telephone expense } & \$ 1,150 \
\text { Cash } & 3,000 \
\text { Accounts payable } & 1,540 \
\text { Jason Heavenly, drawing } & 800 \
\text { Fees earned } & 15,700 \
\text { Rent expense } & 1,400 \
\text { Supplies } & 140 \
\text { Accounts receivable } & 1,500 \
\text { Computer equipment } & 20,000 \
\text { Jason Heavenly, capital (August 1) } & 14,320 \
\text { Wages expense } & 4,800 \
\text { Utilities expense } & 750 \
\text { Notes payable } & 2,400 \
\text { Office expense } & 420
\end{array}$$ ?

Accepted Answer

The answer of Using the following accounting equation elements and...

Question 8

Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is

Accepted Answer

A)  $30,000 
B)  $35,000 
C)  $15,000 
D)  $45,000 
A)  $30,000 
B)  $35,000 
C)  $15,000 
D)  $45,000

Question 9

Collins Landscape Company purchased various landscaping supplies on account to be used for landscape designs for its customers. How will this business transaction affect the accounting equation?

Accepted Answer

Increase assets  (Su

Question 10

Selected transactions completed by a proprietorship are described below. Indicate the effects of each transaction on assets, liabilities, and owner's equity by inserting "+" for increase and "−" for decrease in the appropriate columns at the right. If appropriate, you may insert more than one symbol in a column.

Accepted Answer

The answer of Selected transactions completed by a proprietorship are...

Question 11

Owner's withdrawals

Accepted Answer

A)  increase expenses 
B)  decrease expenses 
C)  increase cash 
D)  decrease owner's equity 
A)  increase expenses 
B)  decrease expenses 
C)  increase cash 
D)  decrease owner's equity

Question 12

Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once.
-Has three sections: operating, investing and financing

Accepted Answer

A) Income statement 
B) Balance sheet 
C) Statement of owner's equity 
D) Statement of cash flows 
A) Income statement 
B) Balance sheet 
C) Statement of owner's equity 
D) Statement of cash flows

Question 13

If total liabilities decreased by $46,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets would be a

Accepted Answer

A)  $106,000 increase 
B)  $14,000 increase 
C)  $14,000 decrease 
D)  $106,000 decrease 
A)  $106,000 increase 
B)  $14,000 increase 
C)  $14,000 decrease 
D)  $106,000 decrease

Question 14

Shiny Kar Company had the following transactions. For each transaction, show the effect on the accounting equation by putting the amount and direction 
(+, -, or NC for no change) in each box of the table below.?

Accepted Answer

The answer of Shiny Kar Company had the following transactions....

Question 15

All of the following are general-purpose financial statements except a (n)

Accepted Answer

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

Question 16

An account receivable is typically classified as a revenue.

Accepted Answer

A) True 
 B)False

Question 17

A summary of cash flows for Evelyn's Event Planning for the year ended December 31 is shown below.

Accepted Answer

The answer of A summary of cash flows for Evelyn's...

Question 18

The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.

Accepted Answer

A) True 
 B)False

Question 19

Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of owner's equity (OE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?

Accepted Answer

A)  I,OE, B 
B)  B, I, OE 
C)  OE, I, B 
D)  B,OE, I 
A)  I,OE, B 
B)  B, I, OE 
C)  OE, I, B 
D)  B,OE, I

Question 20

Liabilities are reported on the

Accepted Answer

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

Exam 1: Introduction to Accounting and Business

Match the following business types with each business listed below. Each may be used more than once. -A health club and spa

Michael Anderson is starting a computer programming business and has deposited an initial investment of $15,000 into the business cash account. Identify how the accounting equation will be affected.

If an owner wanted to know how money flowed into and out of the company, which financial statement would the owner use?

Identify each of the following as either internal or external users of accounting information. A. Payroll manager B. Bank C. President's secretary D. Internal Revenue Service E. Raw material vendors F. Social Security Administration G. Health insurance provider H. Managerial accountant

Indicate whether each of the following accounts represents an asset, liability, or owner's equity: (a)Accounts Payable (b)Wages Expense (c)Capital (d)Accounts Receivable (e)Withdrawal (f)Land

Land originally purchased for $30,000 is sold for $62,000 in cash. What is the effect of the sale on the accounting equation?

Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is

Collins Landscape Company purchased various landscaping supplies on account to be used for landscape designs for its customers. How will this business transaction affect the accounting equation?

Owner's withdrawals

Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once. -Has three sections: operating, investing and financing

If total liabilities decreased by $46,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets would be a

Shiny Kar Company had the following transactions. For each transaction, show the effect on the accounting equation by putting the amount and direction (+, -, or NC for no change) in each box of the table below.?

All of the following are general-purpose financial statements except a (n)

An account receivable is typically classified as a revenue.

A summary of cash flows for Evelyn's Event Planning for the year ended December 31 is shown below.

The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.

Liabilities are reported on the

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

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