Question 1

A corporation is a business that is legally separate and distinct from its owners.

Accepted Answer

A) True 
 B)False

Question 2

Purchasing supplies on account increases liabilities and decreases equity.

Accepted Answer

A) True 
 B)False

Question 3

Simpson Auto Body Repair purchased $20,000 of Machinery. The company paid $8,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in four monthly installments.
(a) How will the purchase affect the accounting equation?
(b) How will the payment of the first monthly installment affect the accounting equation?

Accepted Answer

(a) Increase Total Assets by a net amoun

Question 4

Given the following: Beginning capital $ 58,000
Ending capital $ 30,000
Owner's withdrawals $ 25,000
Calculate net income or net loss.

Accepted Answer

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Question 5

Match between columns
                        Premises: Cash received from customers
Cash paid for owner's withdrawal
Cash paid to suppliers
Cash received from the sale of a building
Cash paid for building
Cash received from the owner's investment
Borrowed cash from a bank

Accepted Answer

The Answer of Financing and Operating and Investing is...

Question 6

Paying an account payable increases liabilities and decreases assets.

Accepted Answer

A) True 
 B)False

Question 7

The objectivity concept requires that

Accepted Answer

A)  business transactions must be consistent with the objectives of the entity 
B)  the Financial Accounting Standards Board must be fair and unbiased in its deliberations over new accounting standards 
C)  accounting principles must meet the objectives of the Security and Exchange Commission 
D)  amounts recorded in the financial statements must be based on independently verifiable evidence 
A)  business transactions must be consistent with the objectives of the entity 
B)  the Financial Accounting Standards Board must be fair and unbiased in its deliberations over new accounting standards 
C)  accounting principles must meet the objectives of the Security and Exchange Commission 
D)  amounts recorded in the financial statements must be based on independently verifiable evidence

Question 8

Selected transactions completed by a proprietorship are described below. Indicate the effects of each transaction on assets, liabilities, and owner's equity by inserting "+" for increase and "-" for decrease in the appropriate columns at the right. If appropriate, you may insert more than one symbol in a column.
 \(\begin{array}{ll}
&&A&L&OE\\hline
(a) & \text{Received cash owner as an additional investment} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(b) &  \text{Purchased supplies on account} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(c) &  \text{Paid rent for the curent month} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(d) &  \text{Received cash for services sold to customers} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(e) &  \text{Returned some defective supplies purchased in (b)} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(f) &  \text{Paid insuratice premiums in advance} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(g) &  \text{Paid cash to creclitor for purchases in(b)} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(h) &  \text{Charged customers for services sold on account} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(i) &  \text{Paid cash to a customer as a refund for an overcharge} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(j) &  \text{Received cash on account from customers} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(k) &  \text{Owner withdrew cash for personal use} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(I) &  \text{Recorded the cost of supplies used during the year} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(m) &  \text{Received invoice for electricity used} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(n) &  \text{Paidwages} &\_\_\_\_&\_\_\_\_&\_\_\_\_\
(o) &  \text{Purchased a truck for cash} &\_\_\_\_&\_\_\_\_&\_\_\_\_
\end{array}\)

Accepted Answer

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Question 9

The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.

Accepted Answer

A) True 
 B)False

Question 10

The total assets and total liabilities of Paul's Pools, a proprietorship, at the beginning and at the end of the current fiscal year are as follows:
 $\begin{array}{ll}
&Jan.~ 1&Dec.~ 31\\hline
\text { Total assets } & \$ 280,000 &\$475,000\
\text { Total liabilities } & 205,000 &130,000
\end{array}$

Accepted Answer

a)
\(\begin{array}{lr}
\text { Owner's e

Question 11

Which of the following isnot a characteristic of a corporation?

Accepted Answer

A)  Corporations are organized as a separate legal taxable entity 
B)  Ownership is divided into shares of stock. 
C)  Corporations experience an ease in obtaining large amounts of resources by issuing stock. 
D)  A corporation's resources are limited to their individual owners' resources. 
A)  Corporations are organized as a separate legal taxable entity 
B)  Ownership is divided into shares of stock. 
C)  Corporations experience an ease in obtaining large amounts of resources by issuing stock. 
D)  A corporation's resources are limited to their individual owners' resources.

Question 12

A summary of cash flows for Lopez Wedding Planning for the year ended December 31, 2011 is shown below.
 Cash receipts:
Cashreceived from customers$ ~~~~~~~~~\$ 57,361 $
Cashreceived from bank loan$~~~~~~~~~15.000$

Prepare a statement of cash flows for Lopez Wedding Planning for the year ended December 31, 2011.

Accepted Answer

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Question 13

On July 1 of the current year, the assets and liabilities of John Wong, DVM, are as follows: Cash, $27,000; Accounts Receivable, $12,300; Supplies, $3,100; Land, $35,000; Accounts Payable, $13,900. What is the amount of owner's equity (John Wong's capital) as of July 1 of the current year?

Accepted Answer

$63,500
($27,000 Cash + $12,30

Question 14

If total liabilities decreased by $46,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is

Accepted Answer

A)  $106,000 increase 
B)  $14,000 increase 
C)  $14,000 decrease 
D)  $106,000 decrease 
A)  $106,000 increase 
B)  $14,000 increase 
C)  $14,000 decrease 
D)  $106,000 decrease

Question 15

How does receiving a bill to be paid next month for services received affect the accounting equation?

Accepted Answer

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

Question 16

Which of the following is not a certification for accountants?

Accepted Answer

A)  CIA 
B)  CMA 
C)  CISA 
D)  All are certifications. 
A)  CIA 
B)  CMA 
C)  CISA 
D)  All are certifications.

Question 17

Profit is the difference between

Accepted Answer

A)  assets and liabilities 
B)  the incoming cash and outgoing cash 
C)  the assets purchased with cash contributed by the owner and the cash spent to operate the business 
D)  the amounts received from customers for goods or services and the amounts paid for the inputs used to provide the goods or services. 
A)  assets and liabilities 
B)  the incoming cash and outgoing cash 
C)  the assets purchased with cash contributed by the owner and the cash spent to operate the business 
D)  the amounts received from customers for goods or services and the amounts paid for the inputs used to provide the goods or services.

Question 18

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total owner's equity was a $200,000 increase.

Accepted Answer

A) True 
 B)False

Question 19

The assets and liabilities of S&P Day Spa at December 31, 2014 and its revenue and expenses for the year are listed below. The capital of the owner was $68,000 at January 1, 2014. The owner invested an additional $10,000 during the year.
   Prepare a balance sheet for the year ended December 31, 2014.

Accepted Answer

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Question 20

The Sarbanes-Oxley Act prohibits CPAs from providing nonaudit investment banking services.

Accepted Answer

A) True 
 B)False

A corporation is a business that is legally separate and distinct from its owners.

Purchasing supplies on account increases liabilities and decreases equity.

Given the following: Beginning capital $ 58,000 Ending capital $ 30,000 Owner's withdrawals $ 25,000 Calculate net income or net loss.

Paying an account payable increases liabilities and decreases assets.

The objectivity concept requires that

The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.

Which of the following isnot a characteristic of a corporation?

On July 1 of the current year, the assets and liabilities of John Wong, DVM, are as follows: Cash, $27,000; Accounts Receivable, $12,300; Supplies, $3,100; Land, $35,000; Accounts Payable, $13,900. What is the amount of owner's equity (John Wong's capital) as of July 1 of the current year?

If total liabilities decreased by $46,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is

How does receiving a bill to be paid next month for services received affect the accounting equation?

Which of the following is not a certification for accountants?

Profit is the difference between

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total owner's equity was a $200,000 increase.

The assets and liabilities of S&P Day Spa at December 31, 2014 and its revenue and expenses for the year are listed below. The capital of the owner was $68,000 at January 1, 2014. The owner invested an additional $10,000 during the year. Prepare a balance sheet for the year ended December 31, 2014.

The Sarbanes-Oxley Act prohibits CPAs from providing nonaudit investment banking services.

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 1: Introduction to Accounting and Business

A corporation is a business that is legally separate and distinct from its owners.

Purchasing supplies on account increases liabilities and decreases equity.

Given the following: Beginning capital $ 58,000 Ending capital $ 30,000 Owner's withdrawals $ 25,000 Calculate net income or net loss.

Paying an account payable increases liabilities and decreases assets.

The objectivity concept requires that

The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.

The total assets and total liabilities of Paul's Pools, a proprietorship, at the beginning and at the end of the current fiscal year are as follows: Jan.\nobreakspace1 Dec.\nobreakspace31 Total assets \ 280,000 \4 75,000 Total liabilities 205,000 130,000

Which of the following isnot a characteristic of a corporation?

On July 1 of the current year, the assets and liabilities of John Wong, DVM, are as follows: Cash, $27,000; Accounts Receivable, $12,300; Supplies, $3,100; Land, $35,000; Accounts Payable, $13,900. What is the amount of owner's equity (John Wong's capital) as of July 1 of the current year?

If total liabilities decreased by $46,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is

How does receiving a bill to be paid next month for services received affect the accounting equation?

Which of the following is not a certification for accountants?

Profit is the difference between

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total owner's equity was a $200,000 increase.

The assets and liabilities of S&P Day Spa at December 31, 2014 and its revenue and expenses for the year are listed below. The capital of the owner was $68,000 at January 1, 2014. The owner invested an additional $10,000 during the year. Prepare a balance sheet for the year ended December 31, 2014.

The Sarbanes-Oxley Act prohibits CPAs from providing nonaudit investment banking services.

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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