Question 1

A sole proprietorship ends with the death of the owner.

Accepted Answer

A) True 
 B)False

Question 2

An accounting report that shows the changes in capital during the accounting period is:

Accepted Answer

A) a balance sheet. 
B) an income statement. 
C) a statement of owner's equity. 
D) All of these answers are correct. 
A) a balance sheet. 
B) an income statement. 
C) a statement of owner's equity. 
D) All of these answers are correct.

Question 3

A legal firm would be considered a:

Accepted Answer

A) merchandise company. 
B) manufacturer. 
C) service company. 
D) None of the above are correct. 
A) merchandise company. 
B) manufacturer. 
C) service company. 
D) None of the above are correct.

Question 4

The payment of accounts payable would:

Accepted Answer

A) increase both assets and liabilities. 
B) increase assets and decrease liabilities. 
C) decrease both assets and liabilities. 
D) decrease assets and increase liabilities. 
A) increase both assets and liabilities. 
B) increase assets and decrease liabilities. 
C) decrease both assets and liabilities. 
D) decrease assets and increase liabilities.

Question 5

The three elements that make up a balance sheet are assets,liabilities and expenses.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would result if the business purchased supplies on credit?

Accepted Answer

A) Supplies would increase and Cash would decrease. 
B) Supplies would increase and Capital would increase. 
C) Supplies would increase and Accounts Payable would increase. 
D) The purchase of supplies is not a business transaction. 
A) Supplies would increase and Cash would decrease. 
B) Supplies would increase and Capital would increase. 
C) Supplies would increase and Accounts Payable would increase. 
D) The purchase of supplies is not a business transaction.

Question 7

Bob purchased a new computer for the company on account.The transaction will:

Accepted Answer

A) increase Computer; increase Capital. 
B) decrease Cash; increase Accounts Payable. 
C) decrease Cash; increase Computer. 
D) increase Computer; increase Accounts Payable. 
A) increase Computer; increase Capital. 
B) decrease Cash; increase Accounts Payable. 
C) decrease Cash; increase Computer. 
D) increase Computer; increase Accounts Payable.

Question 8

The increase or decrease in the owner's equity is reported on the:

Accepted Answer

A) income statement. 
B) statement of owner's equity. 
C) balance sheet. 
D) All of these are correct. 
A) income statement. 
B) statement of owner's equity. 
C) balance sheet. 
D) All of these are correct.

Question 9

To distinguish the total on a financial statement,use double underlines.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following transactions would cause an asset to increase and the owner's equity to increase?

Accepted Answer

A) The owner invested cash in the business. 
B) The business incurred an expense on credit. 
C) The business bought supplies on account. 
D) The owner withdrew cash from the business. 
A) The owner invested cash in the business. 
B) The business incurred an expense on credit. 
C) The business bought supplies on account. 
D) The owner withdrew cash from the business.

Question 11

Calculate the total Liabilities if the company has: Assets totaling $700 and Capital of $450.
$ ________

Accepted Answer

($250 = $7

Question 12

Mark paid $800 cash to partially reduce the amount owed for equipment that was previously bought on account.This transaction would:

Accepted Answer

A) increase both assets and liabilities. 
B) increase assets and decrease liabilities. 
C) decrease both assets and liabilities. 
D) decrease assets and increase liabilities. 
A) increase both assets and liabilities. 
B) increase assets and decrease liabilities. 
C) decrease both assets and liabilities. 
D) decrease assets and increase liabilities.

Question 13

Strum Hardware has total assets of $50,000.What are the total assets if new equipment is purchased for $10,000 cash?

Accepted Answer

A) $45,000 
B) $50,000 
C) $55,000 
D) $60,000 
A) $45,000 
B) $50,000 
C) $55,000 
D) $60,000

Question 14

Eileen's Corner Shoppe purchases a new computer for cash.This causes:

Accepted Answer

A) Cash and Capital to increase. 
B) Computer Equipment and Cash to increase. 
C) Computer Equipment to increase and Cash to decrease. 
D) Accounts Payable to increase and Capital to increase. 
A) Cash and Capital to increase. 
B) Computer Equipment and Cash to increase. 
C) Computer Equipment to increase and Cash to decrease. 
D) Accounts Payable to increase and Capital to increase.

Question 15

Use the following information to prepare 1)an income statement,2)a statement of owner's equity,and 3)a balance sheet for the month ended March 31,200x for Bolthouse Company.
$\begin{array} { l r } 
\text { J. Bolthouse, Capital (beg.) } & \$ 2,000 \
\text { Revenue } & 900 \
\text { Expenses } & 600 \
\text { Withdrawals } & 150 \
\text { Cash } & 3,000 \
\text { Equipment } & 1,000 \
\text { Accounts Receivable } & 150 \
\text { Accounts Payable } & 2,000
\end{array}$

Accepted Answer

The answer of Use the following information to prepare 1)an...

Question 16

Katie's Wedding Planning Service completed the following transactions:
a.Billed clients for service,$1,250.
b.Completed work for clients who paid $500 cash.
c.Received a bill for utilities to be paid later,$120.
d.Collected cash on account from clients,$700.
e.Paid the amount due for utilities.
f.Withdrew $500 cash for personal use.
Required: Record the above transactions in the expanded accounting equation.Note that the items have beginning balances.

Accepted Answer

The answer of Katie's Wedding Planning Service completed the following...

Question 17

An acceptable variation of the accounting equation is:

Accepted Answer

A) Assets - Liabilities = Owner's Equity. 
B) Assets + Owner's Equity = Liabilities. 
C) Assets = Liabilities - Owner's Equity. 
D) All of these answers are correct. 
A) Assets - Liabilities = Owner's Equity. 
B) Assets + Owner's Equity = Liabilities. 
C) Assets = Liabilities - Owner's Equity. 
D) All of these answers are correct.

Question 18

A purchase of a vehicle for cash would have what affect on the accounting equation?

Accepted Answer

A) Total asset amount remains the same. 
B) Total liabilities are overstated. 
C) Total owner's equity is overstated. 
D) Both A and B are correct. 
A) Total asset amount remains the same. 
B) Total liabilities are overstated. 
C) Total owner's equity is overstated. 
D) Both A and B are correct.

Question 19

Legal services were provided to a credit customer.How would this affect the accounting equation?

Accepted Answer

A) Cash and Accounts Receivable increase. 
B) Accounts Payable and Capital increase. 
C) Accounts Receivable and Revenue increase. 
D) None of the above are correct. 
A) Cash and Accounts Receivable increase. 
B) Accounts Payable and Capital increase. 
C) Accounts Receivable and Revenue increase. 
D) None of the above are correct.

Question 20

Which of the following is not an asset?

Accepted Answer

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

Exam 1: Accounting Concepts and Procedures

A sole proprietorship ends with the death of the owner.

An accounting report that shows the changes in capital during the accounting period is:

A legal firm would be considered a:

The payment of accounts payable would:

The three elements that make up a balance sheet are assets,liabilities and expenses.

Which of the following would result if the business purchased supplies on credit?

Bob purchased a new computer for the company on account.The transaction will:

The increase or decrease in the owner's equity is reported on the:

To distinguish the total on a financial statement,use double underlines.

Which of the following transactions would cause an asset to increase and the owner's equity to increase?

Calculate the total Liabilities if the company has: Assets totaling $700 and Capital of $450. $ ________

Mark paid $800 cash to partially reduce the amount owed for equipment that was previously bought on account.This transaction would:

Strum Hardware has total assets of $50,000.What are the total assets if new equipment is purchased for $10,000 cash?

Eileen's Corner Shoppe purchases a new computer for cash.This causes:

An acceptable variation of the accounting equation is:

A purchase of a vehicle for cash would have what affect on the accounting equation?

Legal services were provided to a credit customer.How would this affect the accounting equation?

Which of the following is not an asset?

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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