Question 1

Assets are economic resources of a business expected to be of benefit in the future.

Accepted Answer

A) True 
 B)False

Question 2

All of the following are assets except:

Accepted Answer

A) land. 
B) cash. 
C) Accounts Receivable. 
D) owner withdrawals. 
A) land. 
B) cash. 
C) Accounts Receivable. 
D) owner withdrawals.

Question 3

A business paid $8,500 to a creditor. The effect of this transaction is to:

Accepted Answer

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

Question 4

Selected transactions for Mac's Garage are shown below. State the effect in dollars on the accounting equation of each transaction.
a)George McGuire invests $4,000 cash into a business known as Mac's Garage.
b)George purchases supplies on account for $300.
c)George purchases a new welder for $1,500 cash.
d)George receives the garage's telephone bill amounting to $100 to be paid next month.
e)George withdraws $200 cash for personal use.
f)Garage revenue for the current period amounts to $2,500. (All revenue transactions involved cash.) $\begin{array} { | l | l | l | l | } 
\hline \text { Item } & \text { Assets } & \text { Liabilities } & \begin{array} { c } 
\text { Owner's } \
\text { Equity }
\end{array} \
\hline \text { a) } & & & \
\hline \text { b) } & & & \
\hline \text { c) } & & & \
\hline \text { d) } & & & \
\hline \text { e) } & & & \
\hline \text { f) } & & & \
\hline \text { Totals } & & & \
\hline
\end{array}$

Accepted Answer

The answer of Selected transactions for Mac's Garage are shown...

Question 5

The accounting equation can be stated as assets + liabilities = owner's equity.

Accepted Answer

A) True 
 B)False

Question 6

The Canadian designation CPA stands for Certified Public Accountant.

Accepted Answer

A) True 
 B)False

Question 7

Purchasing a building for $150,000 by paying cash of $30,000 and obtaining a mortgage for $120,000 would:

Accepted Answer

A) increase assets and liabilities by $150,000. 
B) increase liabilities by $120,000. 
C) increase liabilities by $30,000. 
D) decrease assets and liabilities by $120,000. 
A) increase assets and liabilities by $150,000. 
B) increase liabilities by $120,000. 
C) increase liabilities by $30,000. 
D) decrease assets and liabilities by $120,000.

Question 8

Purchasing office equipment on account would:

Accepted Answer

A) decrease owner's equity. 
B) increase owner's equity. 
C) have no effect on owner's equity. 
D) decrease liabilities. 
A) decrease owner's equity. 
B) increase owner's equity. 
C) have no effect on owner's equity. 
D) decrease liabilities.

Question 9

Private Corporations can follow the ASPE or IFRS when preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 10

Purchasing a building for $120,000 by paying cash of $30,000 and obtaining a mortgage for $90,000 would:

Accepted Answer

A) increase assets and increase liabilities by $90,000. 
B) increase owner's equity by $90,000. 
C) increase liabilities by $30,000. 
D) decrease assets and decrease liabilities by $30,000. 
A) increase assets and increase liabilities by $90,000. 
B) increase owner's equity by $90,000. 
C) increase liabilities by $30,000. 
D) decrease assets and decrease liabilities by $30,000.

Question 11

A proprietorship can have two owners, so long as they are husband and wife.

Accepted Answer

A) True 
 B)False

Question 12

For each of the following events, indicate the amount by which assets increased or decreased.
a)Owner invested cash of $25,000 and equipment valued at $10,500 into the business.
b)Purchased $600 of supplies on account.
c)Borrowed $10,000 from the bank, issuing a note payable.
d)Performed a service for $1,500 and immediately collected the cash.
e)Paid the employee salaries of $1,200 cash.
f)Purchased equipment for $550 cash.
g)Received monthly rent bill of $1,300, to be paid in the following month.
h)Performed a service on account for $2,300.

Accepted Answer

a)$35,500 increase
b)$600 incr

Question 13

Which of the following users of accounting information seek to assess the organization's ability to make scheduled payments?

Accepted Answer

A) creditors 
B) taxing authorities 
C) government regulatory agencies 
D) employees 
A) creditors 
B) taxing authorities 
C) government regulatory agencies 
D) employees

Question 14

Which of the following financial statements uses net income or net loss taken directly from the income statement?

Accepted Answer

A) Statement of owner's equity 
B) Statement of cash flow 
C) Balance sheet 
D) Statement of expenditures 
A) Statement of owner's equity 
B) Statement of cash flow 
C) Balance sheet 
D) Statement of expenditures

Question 15

The recording of an owner withdrawal has the same effect on owner's equity as the recording of an owner investment.

Accepted Answer

A) True 
 B)False

Question 16

A cash investment into the business by the owner would:

Accepted Answer

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

Question 17

The payment of rent each month for office space would:

Accepted Answer

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

Question 18

Which of the following statements best describes managerial accounting?

Accepted Answer

A) Managerial accounting focuses on information for internal decision making. 
B) Managerial accounting focuses on outside investors and lenders. 
C) Managerial accounting provides information for the public. 
D) Managerial accounting provides information for taxing authorities. 
A) Managerial accounting focuses on information for internal decision making. 
B) Managerial accounting focuses on outside investors and lenders. 
C) Managerial accounting provides information for the public. 
D) Managerial accounting provides information for taxing authorities.

Question 19

Determine the expenses for the current period based on the following data: $\begin{array}{ll}
\text { Net income for the current period } &\$ 55,000 \
\text { Ending owner's equity } & 85,000 \
\text { Beginning owner's equity } & 49,000 \
\text { Owner withdrawals } & 19,000 \
\text { Revenue for the current period } & 96,000
\end{array}$

Accepted Answer

Revenue - net income

Question 20

If owner's equity is $135,000 and total liabilities are $90,000, then total assets would be:

Accepted Answer

A) $45,000. 
B) $225,000. 
C) $90,000. 
D) $135,000. 
A) $45,000. 
B) $225,000. 
C) $90,000. 
D) $135,000.

Assets are economic resources of a business expected to be of benefit in the future.

All of the following are assets except:

A business paid $8,500 to a creditor. The effect of this transaction is to:

The accounting equation can be stated as assets + liabilities = owner's equity.

The Canadian designation CPA stands for Certified Public Accountant.

Purchasing a building for $150,000 by paying cash of $30,000 and obtaining a mortgage for $120,000 would:

Purchasing office equipment on account would:

Private Corporations can follow the ASPE or IFRS when preparing financial statements.

Purchasing a building for $120,000 by paying cash of $30,000 and obtaining a mortgage for $90,000 would:

A proprietorship can have two owners, so long as they are husband and wife.

Which of the following users of accounting information seek to assess the organization's ability to make scheduled payments?

Which of the following financial statements uses net income or net loss taken directly from the income statement?

The recording of an owner withdrawal has the same effect on owner's equity as the recording of an owner investment.

A cash investment into the business by the owner would:

The payment of rent each month for office space would:

Which of the following statements best describes managerial accounting?

Determine the expenses for the current period based on the following data: Net income for the current period \ 55,000 Ending owner's equity 85,000 Beginning owner's equity 49,000 Owner withdrawals 19,000 Revenue for the current period 96,000

If owner's equity is $135,000 and total liabilities are $90,000, then total assets would be:

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters

Exam 1: Accounting and the Business Environment

Assets are economic resources of a business expected to be of benefit in the future.

All of the following are assets except:

A business paid $8,500 to a creditor. The effect of this transaction is to:

The accounting equation can be stated as assets + liabilities = owner's equity.

The Canadian designation CPA stands for Certified Public Accountant.

Purchasing a building for $150,000 by paying cash of $30,000 and obtaining a mortgage for $120,000 would:

Purchasing office equipment on account would:

Private Corporations can follow the ASPE or IFRS when preparing financial statements.

Purchasing a building for $120,000 by paying cash of $30,000 and obtaining a mortgage for $90,000 would:

A proprietorship can have two owners, so long as they are husband and wife.

Which of the following users of accounting information seek to assess the organization's ability to make scheduled payments?

Which of the following financial statements uses net income or net loss taken directly from the income statement?

The recording of an owner withdrawal has the same effect on owner's equity as the recording of an owner investment.

A cash investment into the business by the owner would:

The payment of rent each month for office space would:

Which of the following statements best describes managerial accounting?

Determine the expenses for the current period based on the following data: Net income for the current period \ 55,000 Ending owner's equity 85,000 Beginning owner's equity 49,000 Owner withdrawals 19,000 Revenue for the current period 96,000

If owner's equity is $135,000 and total liabilities are $90,000, then total assets would be:

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters