Question 1

If liabilities are $10,000 and assets are $20,000,owner's equity will be $10,000.

Accepted Answer

A) True 
 B)False

Question 2

The basic accounting equation is:

Accepted Answer

A) Assets = Revenues - Expenses. 
B) Assets = Liabilities - Owner's Equity. 
C) Assets = Owner's Equity - Liabilities. 
D) Assets = Liabilities + Owner's Equity. 
A) Assets = Revenues - Expenses. 
B) Assets = Liabilities - Owner's Equity. 
C) Assets = Owner's Equity - Liabilities. 
D) Assets = Liabilities + Owner's Equity.

Question 3

Cash is the same thing as Capital.

Accepted Answer

A) True 
 B)False

Question 4

If beginning capital was $110,000,ending capital is $95,000,and the owner's withdrawals were $10,000,the amount of net income or net loss was:

Accepted Answer

A) net income of $5,000. 
B) net income of $15,000. 
C) net loss of $15,000. 
D) net loss of $5,000. 
A) net income of $5,000. 
B) net income of $15,000. 
C) net loss of $15,000. 
D) net loss of $5,000.

Question 5

Which of the following transactions would cause one asset to increase and another asset to decrease?

Accepted Answer

A) The owner invested cash in the business. 
B) The business paid a creditor. 
C) The business incurred an expense on credit. 
D) The business bought supplies for cash. 
A) The owner invested cash in the business. 
B) The business paid a creditor. 
C) The business incurred an expense on credit. 
D) The business bought supplies for cash.

Question 6

Statement of owner's equity shows the change in capital.

Accepted Answer

A) True 
 B)False

Question 7

The statement of owner's equity is the link between the income statement and balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

Assets are equal to:

Accepted Answer

A) liabilities + owner's equity. 
B) liabilities - owner's equity. 
C) liabilities - revenues. 
D) revenues - expenses. 
A) liabilities + owner's equity. 
B) liabilities - owner's equity. 
C) liabilities - revenues. 
D) revenues - expenses.

Question 9

Boxes R' Us paid $3,000 in salaries and wages for February.This transaction will:

Accepted Answer

A) increase expenses and decrease revenue. 
B) increase expenses and increase liabilities. 
C) decrease assets and increase expenses. 
D) decrease assets and expenses. 
A) increase expenses and decrease revenue. 
B) increase expenses and increase liabilities. 
C) decrease assets and increase expenses. 
D) decrease assets and expenses.

Question 10

The balance sheet contains:

Accepted Answer

A) liabilities,expenses and capital. 
B) assets,liabilities and revenues. 
C) expenses,assets and cash. 
D) assets,liabilities and owner's equity. 
A) liabilities,expenses and capital. 
B) assets,liabilities and revenues. 
C) expenses,assets and cash. 
D) assets,liabilities and owner's equity.

Question 11

The purchase of supplies for cash would affect which account category?

Accepted Answer

A) Assets 
B) Liabilities 
C) Capital 
D) Expense 
A) Assets 
B) Liabilities 
C) Capital 
D) Expense

Question 12

Which of the following items are on both the balance sheet and the statement of owner's equity?

Accepted Answer

A) Net loss 
B) Capital 
C) Additional owner's investments 
D) Owner's withdrawals 
A) Net loss 
B) Capital 
C) Additional owner's investments 
D) Owner's withdrawals

Question 13

Tracey's Photography completes the following transactions:
a.Tracey invests $10,000 cash in her company.
b.The company purchases equipment on account,$500.
c.The company purchases additional equipment for cash,$200.
d.The company makes a payment on account for the equipment,$300.
Required: Record the above transactions in the basic accounting equation.
$$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Tracey's Photography }\
\begin{array} { l l c c } 
\quad \text { ASSETS } & = & \text { LIABILITIES } + & \text { OWNER'S EQUITY } \
\text { Cash + Equipment } & = & \begin{array} { c } 
\text { OCcounts Payable }
\end{array} + & \begin{array} { c } 
\text { Tracey's Capital }
\end{array} \
& & & \
\text { a. } & = & & \
\text { b. } & = & & \
\text { c. } & = & & \
\text { d. } & = & & \
\text { Totals } & = &
\end{array}
\end{array}$$

Accepted Answer

The answer of Tracey's Photography completes the following transactions:
a.Tracey invests...

Question 14

Discuss the advantages and disadvantages of sole proprietorships,partnerships and corporations.

Accepted Answer

A sole proprietorship is a business that

Question 15

The accounting equation states that total assets must always equal total liabilities plus owner's equity.

Accepted Answer

A) True 
 B)False

Question 16

The income statement is the first financial statement completed.

Accepted Answer

A) True 
 B)False

Question 17

The Owner's Equity of Logan's Company is equal to one-quarter of the total assets.Liabilities equal $60,000.What is the amount of Owner's Equity?

Accepted Answer

A) $40,000 
B) $20,000 
C) $30,000 
D) None of these answers are correct. 
A) $40,000 
B) $20,000 
C) $30,000 
D) None of these answers are correct.

Question 18

Accounts Receivable results from earning revenue when cash is not yet received.

Accepted Answer

A) True 
 B)False

Question 19

The owner of a business paid personal rent with a company check.This payment reduces Cash as well as increases the expenses of the firm.

Accepted Answer

A) True 
 B)False

Question 20

Total assets are included in the statement of owner's equity.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting Concepts and Procedures

If liabilities are $10,000 and assets are $20,000,owner's equity will be $10,000.

The basic accounting equation is:

Cash is the same thing as Capital.

If beginning capital was $110,000,ending capital is $95,000,and the owner's withdrawals were $10,000,the amount of net income or net loss was:

Which of the following transactions would cause one asset to increase and another asset to decrease?

Statement of owner's equity shows the change in capital.

The statement of owner's equity is the link between the income statement and balance sheet.

Assets are equal to:

Boxes R' Us paid $3,000 in salaries and wages for February.This transaction will:

The balance sheet contains:

The purchase of supplies for cash would affect which account category?

Which of the following items are on both the balance sheet and the statement of owner's equity?

Discuss the advantages and disadvantages of sole proprietorships,partnerships and corporations.

The accounting equation states that total assets must always equal total liabilities plus owner's equity.

The income statement is the first financial statement completed.

The Owner's Equity of Logan's Company is equal to one-quarter of the total assets.Liabilities equal $60,000.What is the amount of Owner's Equity?

Accounts Receivable results from earning revenue when cash is not yet received.

The owner of a business paid personal rent with a company check.This payment reduces Cash as well as increases the expenses of the firm.

Total assets are included in the statement of owner's equity.

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes: The Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, plant, equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, dividends, treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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