Question 1

How does the purchase of office equipment on account affect the accounting equation?

Accepted Answer

A) Assets increase; liabilities decrease 
B) Assets increase; owner's equity increases 
C) Assets increase; liabilities increase 
D) Liabilities increase; owner's equity decreases 
A) Assets increase; liabilities decrease 
B) Assets increase; owner's equity increases 
C) Assets increase; liabilities increase 
D) Liabilities increase; owner's equity decreases

Question 2

The balance sheet shows the company's financial position as of a particular date.

Accepted Answer

A) True 
 B)False

Question 3

If expenses are less than revenue,a net income is incurred.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would result if the owner invested cash in the business?

Accepted Answer

A) Cash would increase and Capital would decrease. 
B) Cash would increase and Capital would increase. 
C) Cash would decrease and Capital would increase. 
D) An investment by the owner is not a business transaction. 
A) Cash would increase and Capital would decrease. 
B) Cash would increase and Capital would increase. 
C) Cash would decrease and Capital would increase. 
D) An investment by the owner is not a business transaction.

Question 5

Generally Accepted Accounting Principles are the procedures and guidelines that must be followed during the accounting process.

Accepted Answer

A) True 
 B)False

Question 6

Put the 7 main steps of the accounting process in order (from 1 -7)below:
 _________$\text {Classifying}$
_________$\text {Analyzing}$
_________$\text {Recording}$
_________$\text {Interpreting}$
_________$\text {Reporting}$
_________$\text {Communication}$
_________$\text {Summarizing}$

Accepted Answer

The answer of Put the 7 main steps of the...

Question 7

Determine the ending capital balance of a business which had a beginning capital balance of $1,970,additional investments of $530,withdrawals of $750,revenue of $3,790,and expenses of $2,600.
$ ________

Accepted Answer

$2,940 [$1

Question 8

Which accounts are affected when the company provides services to a cash customer?

Accepted Answer

A) Assets and Capital 
B) Liabilities and Capital 
C) Assets and Revenue 
D) None of the above are correct. 
A) Assets and Capital 
B) Liabilities and Capital 
C) Assets and Revenue 
D) None of the above are correct.

Question 9

The function of accounting includes analyzing,recording,classifying,summarizing,reporting,and interpreting financial information.

Accepted Answer

A) True 
 B)False

Question 10

Harvest Moon Company has total assets of $15,000.If $3,000 cash is used to purchase a new computer,the total assets would be:

Accepted Answer

A) $15,000. 
B) $13,000. 
C) $17,000. 
D) $2,000. 
A) $15,000. 
B) $13,000. 
C) $17,000. 
D) $2,000.

Question 11

The financial statement that shows business results in terms of revenue and expenses is:

Accepted Answer

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

Question 12

The left side of the accounting equation must always equal the right side of the equation.

Accepted Answer

A) True 
 B)False

Question 13

Crystal Clear Imagery received and paid a utility bill for $500 for the month of November.This transaction will:

Accepted Answer

A) increase Cash and increase Utility Expense. 
B) decrease Cash and increase Utility Expense. 
C) increase Cash and decrease Utility Expense. 
D) increase Utility Expense and decrease Withdrawal. 
A) increase Cash and increase Utility Expense. 
B) decrease Cash and increase Utility Expense. 
C) increase Cash and decrease Utility Expense. 
D) increase Utility Expense and decrease Withdrawal.

Question 14

The purpose of the accounting process is to provide financial information about:

Accepted Answer

A) sole proprietorships. 
B) small businesses. 
C) large corporations. 
D) All of these answers are correct. 
A) sole proprietorships. 
B) small businesses. 
C) large corporations. 
D) All of these answers are correct.

Question 15

Accounting provides information to:

Accepted Answer

A) managers. 
B) government. 
C) investors. 
D) All of these answers are correct. 
A) managers. 
B) government. 
C) investors. 
D) All of these answers are correct.

Question 16

The Sarbanes-Oxley Act was passed to:

Accepted Answer

A) prevent fraud at public companies. 
B) replace all of the old accounting procedures with new ones. 
C) improve the accuracy of the company's financial reporting. 
D) Both A and C are correct. 
A) prevent fraud at public companies. 
B) replace all of the old accounting procedures with new ones. 
C) improve the accuracy of the company's financial reporting. 
D) Both A and C are correct.

Question 17

Cash withdrawals by the owner increase both equity and assets.

Accepted Answer

A) True 
 B)False

Question 18

If 'Ol Fashioned Toys' revenues are greater than its expenses during the accounting period:

Accepted Answer

A) assets will increase more than liabilities. 
B) liabilities will increase more than assets. 
C) the business will incur a loss. 
D) the business will earn a net income. 
A) assets will increase more than liabilities. 
B) liabilities will increase more than assets. 
C) the business will incur a loss. 
D) the business will earn a net income.

Question 19

A corporation:

Accepted Answer

A) can continue indefinitely. 
B) is owned by stockholders. 
C) has limited risk to stockholders. 
D) all of the above. 
A) can continue indefinitely. 
B) is owned by stockholders. 
C) has limited risk to stockholders. 
D) all of the above.

Question 20

A business paid $5,000 to a creditor in payment of an amount owed.The effect of the transaction on the accounting equation was to:

Accepted Answer

A) increase one asset,decrease another asset. 
B) increase an asset,increase a liability. 
C) decrease an asset,decrease a liability. 
D) increase an asset,increase owner's equity. 
A) increase one asset,decrease another asset. 
B) increase an asset,increase a liability. 
C) decrease an asset,decrease a liability. 
D) increase an asset,increase owner's equity.

Exam 1: Accounting Concepts and Procedures

How does the purchase of office equipment on account affect the accounting equation?

The balance sheet shows the company's financial position as of a particular date.

If expenses are less than revenue,a net income is incurred.

Which of the following would result if the owner invested cash in the business?

Generally Accepted Accounting Principles are the procedures and guidelines that must be followed during the accounting process.

Determine the ending capital balance of a business which had a beginning capital balance of $1,970,additional investments of $530,withdrawals of $750,revenue of $3,790,and expenses of $2,600. $ ________

Which accounts are affected when the company provides services to a cash customer?

The function of accounting includes analyzing,recording,classifying,summarizing,reporting,and interpreting financial information.

Harvest Moon Company has total assets of $15,000.If $3,000 cash is used to purchase a new computer,the total assets would be:

The financial statement that shows business results in terms of revenue and expenses is:

The left side of the accounting equation must always equal the right side of the equation.

Crystal Clear Imagery received and paid a utility bill for $500 for the month of November.This transaction will:

The purpose of the accounting process is to provide financial information about:

Accounting provides information to:

The Sarbanes-Oxley Act was passed to:

Cash withdrawals by the owner increase both equity and assets.

If 'Ol Fashioned Toys' revenues are greater than its expenses during the accounting period:

A corporation:

A business paid $5,000 to a creditor in payment of an amount owed.The effect of the transaction on the accounting equation was to:

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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