Question 1

In a shift of assets, the composition of the assets changes but total assets do not change.

Accepted Answer

A) True 
 B)False

Question 2

Record the following transactions in the basic accounting equation:
a. Brian invests $10,000 cash to begin an accounting service.
b. The company buys office furniture for cash, $600.
c. The company buys additional office furniture on account, $300.
d. The company makes a payment on the office furniture, $200.

Accepted Answer

The answer of Record the following transactions in the basic...

Question 3

Items owned by the business such as land, supplies and equipment are:

Accepted Answer

A) assets. 
B) liabilities. 
C) owner's equity. 
D) revenue. 
A) assets. 
B) liabilities. 
C) owner's equity. 
D) revenue.

Question 4

Logan's Motor Sports buys $30,000 of equipment on credit. Which of the following is a true statement?

Accepted Answer

A) Total assets increase. 
B) Total assets are unchanged. 
C) Total liabilities decrease. 
D) Total liabilities are unchanged. 
A) Total assets increase. 
B) Total assets are unchanged. 
C) Total liabilities decrease. 
D) Total liabilities are unchanged.

Question 5

Victoria received $400 from customers in partial payment for accounting services performed previously. The recording of this transaction would:

Accepted Answer

A) increase Cash and Victoria's Capital $400. 
B) increase Cash and decrease Accounts Receivable $400. 
C) increase Cash and increase Accounts Receivable $400. 
D) decrease Accounts Receivable and increase Victoria's Capital $400. 
A) increase Cash and Victoria's Capital $400. 
B) increase Cash and decrease Accounts Receivable $400. 
C) increase Cash and increase Accounts Receivable $400. 
D) decrease Accounts Receivable and increase Victoria's Capital $400.

Question 6

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.

Question 7

The cash purchase of a truck was recorded as a purchase on credit. Due to this error:

Accepted Answer

A) assets were overstated. 
B) liabilities were overstated. 
C) answers A and B are both correct. 
D) None of the above are correct. 
A) assets were overstated. 
B) liabilities were overstated. 
C) answers A and B are both correct. 
D) None of the above are correct.

Question 8

Which of the following transactions has no effect on owner's equity?

Accepted Answer

A) Paying salaries expense 
B) Equipment purchase 
C) Billing for services rendered 
D) A withdrawal 
A) Paying salaries expense 
B) Equipment purchase 
C) Billing for services rendered 
D) A withdrawal

Question 9

If the assets owned by a business total $100,000, owner's equity must also total $100,000.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a type of business organization?

Accepted Answer

A) Corporation 
B) Partnership 
C) Sole proprietorship 
D) Operation 
A) Corporation 
B) Partnership 
C) Sole proprietorship 
D) Operation

Question 11

The purchase of equipment with both cash and on account was recorded as only a credit purchase. Due to this error:

Accepted Answer

A) assets would be understated. 
B) liabilities would be overstated. 
C) owner's equity would be overstated. 
D) None of the above are correct. 
A) assets would be understated. 
B) liabilities would be overstated. 
C) owner's equity would be overstated. 
D) None of the above are correct.

Question 12

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 13

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 14

The statement of owner's equity shows assets, liabilities and capital..

Accepted Answer

A) True 
 B)False

Question 15

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 16

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 17

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 18

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 19

Expenses:

Accepted Answer

A) are costs the company incurs in carrying on operations. 
B) are a subdivision of owner's equity. 
C) record personal expenses not related to the business. 
D) Both A and B are correct. 
A) are costs the company incurs in carrying on operations. 
B) are a subdivision of owner's equity. 
C) record personal expenses not related to the business. 
D) Both A and B are correct.

Question 20

The left side of the accounting equation shows what is owned by the business.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting Concepts and Procedures

In a shift of assets, the composition of the assets changes but total assets do not change.

Items owned by the business such as land, supplies and equipment are:

Logan's Motor Sports buys $30,000 of equipment on credit. Which of the following is a true statement?

Victoria received $400 from customers in partial payment for accounting services performed previously. The recording of this transaction would:

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:

The cash purchase of a truck was recorded as a purchase on credit. Due to this error:

Which of the following transactions has no effect on owner's equity?

If the assets owned by a business total $100,000, owner's equity must also total $100,000.

Which of the following is not a type of business organization?

The purchase of equipment with both cash and on account was recorded as only a credit purchase. Due to this error:

Accounting provides information to:

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

The statement of owner's equity shows assets, liabilities and capital..

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

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

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

A corporation:

Expenses:

The left side of the accounting equation shows what is owned by the business.

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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