Question 1

If an individual asset is increased, then

Accepted Answer

A)  there may be an equal decrease in a specific liability. 
B)  there may be an equal decrease in owner's equity. 
C)  there may be an equal decrease in another asset. 
D)  All of these answer choices are possible. 
A)  there may be an equal decrease in a specific liability. 
B)  there may be an equal decrease in owner's equity. 
C)  there may be an equal decrease in another asset. 
D)  All of these answer choices are possible.

Question 2

Liabilities of a company would not include

Accepted Answer

A)  notes payable. 
B)  accounts payable. 
C)  salaries and wages payable. 
D)  cash. 
A)  notes payable. 
B)  accounts payable. 
C)  salaries and wages payable. 
D)  cash.

Question 3

When a company borrows money from the bank, the transaction increases total assets and total liabilities.

Accepted Answer

A) True 
 B)False

Question 4

Collection of a $1,500 Accounts Receivable

Accepted Answer

A)  increases an asset $1,500; decreases an asset $1,500. 
B)  increases an asset $1,500; decreases a liability $1,500. 
C)  decreases a liability $1,500; increases owner's equity $1,500. 
D)  decreases an asset $1,500; decreases a liability $1,500. 
A)  increases an asset $1,500; decreases an asset $1,500. 
B)  increases an asset $1,500; decreases a liability $1,500. 
C)  decreases a liability $1,500; increases owner's equity $1,500. 
D)  decreases an asset $1,500; decreases a liability $1,500.

Question 5

Which of the following accounts is a liability?

Accepted Answer

A)  Accounts Payable 
B)  Owner's Capital 
C)  Accounts Receivable 
D)  Owner's Drawings 
A)  Accounts Payable 
B)  Owner's Capital 
C)  Accounts Receivable 
D)  Owner's Drawings

Question 6

Selected transactions for Parton Company are listed below. List the number of the transaction and then descriSample: Made initial cash investment in the business.
The answer would be-Increase in assets and increase in owner's equity.
1. Paid monthly utility bill.
2. Purchased new display case for cash.
3. Paid cash for repair work on security system.
4. Billed customers for services performed.
5. Received cash from customers billed in 4.
6. Withdrew cash for owner's personal use.
7. Incurred advertising expenses on account.
8. Paid monthly rent.
9. Received cash from customers when service was rendered.

Accepted Answer

1. Decrease in assets and decrease in ow

Question 7

Owner's equity is decreased by

Accepted Answer

A)  assets. 
B)  revenues. 
C)  expenses. 
D)  liabilities. 
A)  assets. 
B)  revenues. 
C)  expenses. 
D)  liabilities.

Question 8

Odom Company compiled the following financial information as of December 31, 2020: $\begin{array}{lr}
\text { Revenues } & \$ 840,000 \
\text { Owner's Capital }(1 / 1 / 20) & 170,000 \
\text { Equipment } & 330,000 \
\text { Expenses } & 740,000 \
\text { Cash } & 40,000 \
\text { Owner's Drawings } & 50,000 \
\text { Supplies } & 20,000 \
\text { Sales Tax Payable } & 10,000 \
\text { Accounts payable } & 50,000 \
\text { Notes payable } & 200,000 \
\text { Accounts receivable } & 90,000
\end{array}$ Odom's assets on December 31, 2020 are

Accepted Answer

A)  $150,000. 
B)  $370,000. 
C)  $390,000. 
D)  $480,000. 
A)  $150,000. 
B)  $370,000. 
C)  $390,000. 
D)  $480,000.

Question 9

Mellon Company purchases $1,500 of equipment from Standard Office Equipment Inc. for cash. The effect on the components of the basic accounting equation of Mellon Company is

Accepted Answer

A)  an increase in assets and liabilities. 
B)  a decrease in assets and liabilities. 
C)  no change in total assets. 
D)  an increase in assets and a decrease in liabilities. 
A)  an increase in assets and liabilities. 
B)  a decrease in assets and liabilities. 
C)  no change in total assets. 
D)  an increase in assets and a decrease in liabilities.

Question 10

Benvenuto's paid salaries payable. The salaries payable was originally recorded last month. The payment of the salaries payable

Accepted Answer

A)  increases expenses. 
B)  decreases expenses. 
C)  has no effect on expenses. 
D)  decreases owner's equity. 
A)  increases expenses. 
B)  decreases expenses. 
C)  has no effect on expenses. 
D)  decreases owner's equity.

Question 11

The performance of services for cash increases total assets and total owner's equity.

Accepted Answer

A) True 
 B)False

Question 12

The residual claim on total assets of a business is known as ________________ and is equal to total assets minus total liabilities.

Accepted Answer

The answer of The residual claim on total assets of...

Question 13

The effect of an investment by the owner has the opposite impact on the accounting equation of a withdrawal by the owner.

Accepted Answer

A) True 
 B)False

Question 14

If Miller's Plumbing pays its employees, then the company's

Accepted Answer

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

Question 15

Luis Consulting started the year with total assets of $60,000 and total liabilities of $17,000. During the year, the business recorded $48,000 in consulting revenues and $36,000 in expenses. Luis made an additional investment of $8,000 and withdrew cash of $9,000 during the year. The owner's equity at the end of the year was

Accepted Answer

A)  $33,000. 
B)  $54,000. 
C)  $57,000. 
D)  $63,000. 
A)  $33,000. 
B)  $54,000. 
C)  $57,000. 
D)  $63,000.

Question 16

When an owner withdraws cash or other assets from a business for personal use, these withdrawals are termed

Accepted Answer

A)  depletions. 
B)  consumptions. 
C)  drawings. 
D)  a credit line. 
A)  depletions. 
B)  consumptions. 
C)  drawings. 
D)  a credit line.

Question 17

The owner of Pope Enterprises paid the current month's salaries expense and withdrew cash from the business for personal use. These two transactions

Accepted Answer

A)  both decrease owner's equity. 
B)  have no effect on total assets. 
C)  both decrease liabilities. 
D)  do not affect net income. 
A)  both decrease owner's equity. 
B)  have no effect on total assets. 
C)  both decrease liabilities. 
D)  do not affect net income.

Question 18

The purchase of store equipment for cash reduces assets and owner's equity by equal amounts.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following accounts is not an asset?

Accepted Answer

A)  Accounts Receivable 
B)  Service Revenue 
C)  Equipment 
D)  Supplies 
A)  Accounts Receivable 
B)  Service Revenue 
C)  Equipment 
D)  Supplies

Question 20

Analyze the transactions of a business organized as a proprietorship described below and indicate their effect on the basic accounting equation. Use a plus sign (+) to indicate an increase and a minus sign (-) to indicate a decrease.

Accepted Answer

The answer of Analyze the transactions of a business organized...

If an individual asset is increased, then

Liabilities of a company would not include

When a company borrows money from the bank, the transaction increases total assets and total liabilities.

Collection of a $1,500 Accounts Receivable

Which of the following accounts is a liability?

Owner's equity is decreased by

Mellon Company purchases $1,500 of equipment from Standard Office Equipment Inc. for cash. The effect on the components of the basic accounting equation of Mellon Company is

Benvenuto's paid salaries payable. The salaries payable was originally recorded last month. The payment of the salaries payable

The performance of services for cash increases total assets and total owner's equity.

The residual claim on total assets of a business is known as ________________ and is equal to total assets minus total liabilities.

The effect of an investment by the owner has the opposite impact on the accounting equation of a withdrawal by the owner.

If Miller's Plumbing pays its employees, then the company's

When an owner withdraws cash or other assets from a business for personal use, these withdrawals are termed

The owner of Pope Enterprises paid the current month's salaries expense and withdrew cash from the business for personal use. These two transactions

The purchase of store equipment for cash reduces assets and owner's equity by equal amounts.

Which of the following accounts is not an asset?

Analyze the transactions of a business organized as a proprietorship described below and indicate their effect on the basic accounting equation. Use a plus sign (+) to indicate an increase and a minus sign (-) to indicate a decrease.

Welcome to Accounting

The Recording Process: Debits and Credits

The Recording Process: the Journal, the Ledger, and the Trial Balance

Adjusting the Accounts and Preparing an Adjusted Trial Balance

Completing a Worksheet and Completing the Accounting Cycle

Merchandising Companies: Purchases Perpetual

Merchandising Companies: Sales Perpetual

Merchandising Companies: Worksheets and Financial Statements Perpetual

Special Journals

Inventory

Cash, Banking, and Internal Controls

Payroll Accounting: Employee Taxes and Records

Payroll Accounting: Employer Taxes and Records

Filters

Exam 2: The Accounting Equation and Transaction Analysis

If an individual asset is increased, then

Liabilities of a company would not include

When a company borrows money from the bank, the transaction increases total assets and total liabilities.

Collection of a $1,500 Accounts Receivable

Which of the following accounts is a liability?

Owner's equity is decreased by

Mellon Company purchases $1,500 of equipment from Standard Office Equipment Inc. for cash. The effect on the components of the basic accounting equation of Mellon Company is

Benvenuto's paid salaries payable. The salaries payable was originally recorded last month. The payment of the salaries payable

The performance of services for cash increases total assets and total owner's equity.

The residual claim on total assets of a business is known as ________________ and is equal to total assets minus total liabilities.

The effect of an investment by the owner has the opposite impact on the accounting equation of a withdrawal by the owner.

If Miller's Plumbing pays its employees, then the company's

When an owner withdraws cash or other assets from a business for personal use, these withdrawals are termed

The owner of Pope Enterprises paid the current month's salaries expense and withdrew cash from the business for personal use. These two transactions

The purchase of store equipment for cash reduces assets and owner's equity by equal amounts.

Which of the following accounts is not an asset?

Analyze the transactions of a business organized as a proprietorship described below and indicate their effect on the basic accounting equation. Use a plus sign (+) to indicate an increase and a minus sign (-) to indicate a decrease.

Welcome to Accounting

The Recording Process: Debits and Credits

The Recording Process: the Journal, the Ledger, and the Trial Balance

Adjusting the Accounts and Preparing an Adjusted Trial Balance

Completing a Worksheet and Completing the Accounting Cycle

Merchandising Companies: Purchases Perpetual

Merchandising Companies: Sales Perpetual

Merchandising Companies: Worksheets and Financial Statements Perpetual

Special Journals

Inventory

Cash, Banking, and Internal Controls

Payroll Accounting: Employee Taxes and Records

Payroll Accounting: Employer Taxes and Records

Filters