Question 1

Transactions affecting owner's equity include

Accepted Answer

A)  owner's investments and payment of liabilities 
B)  owner's investments, owner's withdrawals, earning of revenues, and incurrence of expenses 
C)  owner's investments, earning of revenues, incurrence of expenses, and collection of accounts receivable 
D)  owner's withdrawals, earning of revenues, incurrence of expenses, and purchase of supplies on account 
A)  owner's investments and payment of liabilities 
B)  owner's investments, owner's withdrawals, earning of revenues, and incurrence of expenses 
C)  owner's investments, earning of revenues, incurrence of expenses, and collection of accounts receivable 
D)  owner's withdrawals, earning of revenues, incurrence of expenses, and purchase of supplies on account

Question 2

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Cash investment by owner

Accepted Answer

A) Increase assets, increase liabilities 
B) Increase liabilities, decrease owner's equity 
C) Increase assets, increase owner's equity 
D) No effect 
E) Decrease assets, decrease liabilities
F)Decrease assets, decrease owner's equity 
A) Increase assets, increase liabilities 
B) Increase liabilities, decrease owner's equity 
C) Increase assets, increase owner's equity 
D) No effect 
E) Decrease assets, decrease liabilities
F)Decrease assets, decrease owner's equity

Question 3

Explain the interrelationship between the balance sheet and the statement of cash flows.

Accepted Answer

The cash reported on the balan

Question 4

Darnell Company purchased $88,000 of computer equipment from Joseph Company. Darnell Company paid for the equipment using cash that had been obtained from the initial investment by Donnie Darnell.​Which entity or entities 
(Darnell Company, Joseph Company, and Donnie Darnell) should record the transaction involving the computer equipment on their accounting records?

Accepted Answer

Darnell Co

Question 5

There are four transactions that affect owner's equity.​
(a) What are the two types of transactions that increase owner's equity?
(b) What are the two types of transactions that decrease owner's equity?

Accepted Answer

(a) Additional investment by t

Question 6

On May 7, Carpet Barn Company offered to pay $83,000 for land that had a selling price of $105,000. On May 15, Carpet Barn accepted a counteroffer of $95,000. On June 5, the land was assessed at a value of $115,000 for property tax purposes. On December 10, Carpet Barn Company was offered $135,000 for the land by another company. At what value should the land be recorded in Carpet Barn Company's records?

Accepted Answer

The answer of On May 7, Carpet Barn Company offered...

Question 7

Match the following business types with each business listed below. Each may be used more than once.
-A tax preparation firm

Accepted Answer

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

Question 8

Which of the following asset accounts is increased when a receivable is collected?

Accepted Answer

A)  Accounts Receivable 
B)  Supplies 
C)  Accounts Payable 
D)  Cash 
A)  Accounts Receivable 
B)  Supplies 
C)  Accounts Payable 
D)  Cash

Question 9

If net income for a proprietorship was $50,000, the owner withdrew $20,000 in cash, and the owner invested $10,000 in cash, the capital of the owner increased by $40,000.

Accepted Answer

A) True 
 B)False

Question 10

Many countries outside the United States use financial accounting standards issued by the

Accepted Answer

A)  AICPA 
B)  SEC 
C)  IASB 
D)  FASB 
A)  AICPA 
B)  SEC 
C)  IASB 
D)  FASB

Question 11

Identify each of the following as an  (1) increase to owner's equity or a  (2) decrease to owner's equity.
(a)Fees earned
(b)Wages expense
(c)Withdrawals
(d)Lawn care revenue
(e)Investment
(f)Supplies expense

Accepted Answer

(a)1
(b)2

Question 12

The business entity concept means that

Accepted Answer

A)  the owner is part of the business entity 
B)  an entity is organized according to state or federal statutes 
C)  an entity is organized according to the rules set by the FASB 
D)  the entity is an individual economic unit for which data are recorded, analyzed, and reported 
A)  the owner is part of the business entity 
B)  an entity is organized according to state or federal statutes 
C)  an entity is organized according to the rules set by the FASB 
D)  the entity is an individual economic unit for which data are recorded, analyzed, and reported

Question 13

The excess of revenue over the expenses incurred in earning the revenue is called capital.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not a business transaction?

Accepted Answer

A)  Erin deposits $15,000 in a bank account in the name of Erin's Lawn Service. 
B)  Erin provided services to customers earning fees of $600. 
C)  Erin purchased hedge trimmers for her lawn service agreeing to pay the supplier next month. 
D)  Erin pays her monthly personal credit card bill. 
A)  Erin deposits $15,000 in a bank account in the name of Erin's Lawn Service. 
B)  Erin provided services to customers earning fees of $600. 
C)  Erin purchased hedge trimmers for her lawn service agreeing to pay the supplier next month. 
D)  Erin pays her monthly personal credit card bill.

Question 15

Earning revenue

Accepted Answer

A)  increases assets, increases owner's equity 
B)  increases assets, decreases owner's equity 
C)  increases one asset, decreases another asset 
D)  decreases assets, increases liabilities 
A)  increases assets, increases owner's equity 
B)  increases assets, decreases owner's equity 
C)  increases one asset, decreases another asset 
D)  decreases assets, increases liabilities

Question 16

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Purchased equipment for cash

Accepted Answer

A) Increase assets, increase liabilities 
B) Increase liabilities, decrease owner's equity 
C) Increase assets, increase owner's equity 
D) No effect 
E) Decrease assets, decrease liabilities
F)Decrease assets, decrease owner's equity 
A) Increase assets, increase liabilities 
B) Increase liabilities, decrease owner's equity 
C) Increase assets, increase owner's equity 
D) No effect 
E) Decrease assets, decrease liabilities
F)Decrease assets, decrease owner's equity

Question 17

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Paid wages

Accepted Answer

A) Increase assets, increase liabilities 
B) Increase liabilities, decrease owner's equity 
C) Increase assets, increase owner's equity 
D) No effect 
E) Decrease assets, decrease liabilities
F)Decrease assets, decrease owner's equity 
A) Increase assets, increase liabilities 
B) Increase liabilities, decrease owner's equity 
C) Increase assets, increase owner's equity 
D) No effect 
E) Decrease assets, decrease liabilities
F)Decrease assets, decrease owner's equity

Question 18

The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of owners.

Accepted Answer

A) True 
 B)False

Question 19

Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once.
-Reports as of a specific date

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 20

Which type of accountant typically practices as an individual or as a member of a public accounting firm?

Accepted Answer

A)  Certified Public Accountant 
B)  Certified Payroll Professional 
C)  Certified Internal Auditor 
D)  Certified Management Accountant 
A)  Certified Public Accountant 
B)  Certified Payroll Professional 
C)  Certified Internal Auditor 
D)  Certified Management Accountant

Exam 1: Introduction to Accounting and Business

Transactions affecting owner's equity include

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Cash investment by owner

Explain the interrelationship between the balance sheet and the statement of cash flows.

There are four transactions that affect owner's equity.​ (a) What are the two types of transactions that increase owner's equity? (b) What are the two types of transactions that decrease owner's equity?

Match the following business types with each business listed below. Each may be used more than once. -A tax preparation firm

Which of the following asset accounts is increased when a receivable is collected?

If net income for a proprietorship was $50,000, the owner withdrew $20,000 in cash, and the owner invested $10,000 in cash, the capital of the owner increased by $40,000.

Many countries outside the United States use financial accounting standards issued by the

Identify each of the following as an (1) increase to owner's equity or a (2) decrease to owner's equity. (a)Fees earned (b)Wages expense (c)Withdrawals (d)Lawn care revenue (e)Investment (f)Supplies expense

The business entity concept means that

The excess of revenue over the expenses incurred in earning the revenue is called capital.

Which of the following is not a business transaction?

Earning revenue

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Purchased equipment for cash

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Paid wages

The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of owners.

Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once. -Reports as of a specific date

Which type of accountant typically practices as an individual or as a member of a public accounting firm?

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

Filters

There are four transactions that affect owner's equity. (a) What are the two types of transactions that increase owner's equity? (b) What are the two types of transactions that decrease owner's equity?