Question 1

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 2

Katie's Vegetarian Restaurant, with total assets of $90,000, borrows $15,000 from the bank. Which of the following is a true statement upon borrowing the money?

Accepted Answer

A) Total assets are now $105,000. 
B) Total assets are now $80,000. 
C) Total assets are now $15,000. 
D) Total assets are now $75,000. 
A) Total assets are now $105,000. 
B) Total assets are now $80,000. 
C) Total assets are now $15,000. 
D) Total assets are now $75,000.

Question 3

A revenue should be recorded when:

Accepted Answer

A) it is earned. 
B) payment is received. 
C) the invoice is sent to the customer. 
D) None of the above are correct. 
A) it is earned. 
B) payment is received. 
C) the invoice is sent to the customer. 
D) None of the above are correct.

Question 4

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 5

The net income or net loss is calculated on the:

Accepted Answer

A) balance sheet. 
B) statement of owner's equity. 
C) income statement. 
D) none of these. 
A) balance sheet. 
B) statement of owner's equity. 
C) income statement. 
D) none of these.

Question 6

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 7

Cash is the same thing as Capital.

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

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

Accepted Answer

A) True 
 B)False

Question 10

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 11

Which of the following items is not listed on the balance sheet?

Accepted Answer

A) Accounts Payable 
B) Accounts Receivable 
C) Revenue 
D) Equipment 
A) Accounts Payable 
B) Accounts Receivable 
C) Revenue 
D) Equipment

Question 12

Given the following account balances, determine the total liabilities. Cash $350, Accounts Receivable $275, Equipment $300 and Capital $700.
$ ________

Accepted Answer

$225 [$350

Question 13

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

Accepted Answer

($250 = $7

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

When expenses are greater than revenue, net loss is the result.

Accepted Answer

A) True 
 B)False

Question 16

Carrie billed her legal clients $6,000 for legal work completed during the month. This transaction will:

Accepted Answer

A) cause a $6,000 increase in revenues and liabilities. 
B) cause a $6,000 increase in revenues and a decrease in liabilities. 
C) cause a $6,000 increase in assets and revenues. 
D) not be recorded until the cash is collected. 
A) cause a $6,000 increase in revenues and liabilities. 
B) cause a $6,000 increase in revenues and a decrease in liabilities. 
C) cause a $6,000 increase in assets and revenues. 
D) not be recorded until the cash is collected.

Question 17

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 18

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

Accepted Answer

A) True 
 B)False

Question 19

If a company's revenues are higher than its expenses, it will cause:

Accepted Answer

A) an increase in owner's equity. 
B) a decrease in owner's equity. 
C) an increase in assets. 
D) no effect on owner's equity. 
A) an increase in owner's equity. 
B) a decrease in owner's equity. 
C) an increase in assets. 
D) no effect on owner's equity.

Question 20

Cash investments by the owner increases both equity and assets.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting Concepts and Procedures

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

Katie's Vegetarian Restaurant, with total assets of $90,000, borrows $15,000 from the bank. Which of the following is a true statement upon borrowing the money?

A revenue should be recorded when:

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 net income or net loss is calculated on the:

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

Cash is the same thing as Capital.

Assets are equal to:

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

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

Which of the following items is not listed on the balance sheet?

Given the following account balances, determine the total liabilities. Cash $350, Accounts Receivable $275, Equipment $300 and Capital $700. $ ________

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

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

When expenses are greater than revenue, net loss is the result.

Carrie billed her legal clients $6,000 for legal work completed during the month. This transaction will:

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

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

If a company's revenues are higher than its expenses, it will cause:

Cash investments by the owner increases both equity and assets.

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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