Question 1

Total assets are included in the statement of owner's equity.

Accepted Answer

A) True 
 B)False

Question 2

If a company's revenues are greater than its expenses, increasing its revenues and decreasing its expenses will

Accepted Answer

A)  decrease net income. 
B)  increase net income. 
C)  decrease assets. 
D)  not affect owner's equity.

Question 3

The income statement is prepared first so the information can be used to prepare the statement of owner's equity.

Accepted Answer

A) True 
 B)False

Question 4

If total assets are $30,000 and total liabilities are $8,000, Capital must equal

Accepted Answer

A)  $22,000. 
B)  $38,000. 
C)  $8,000. 
D)  $30,000.

Question 5

Double-underlining is used for every sub-section on a Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 6

If total liabilities are $3,000 and total assets are $10,000, owner's equity must be

Accepted Answer

A)  $7,000. 
B)  $3,000. 
C)  $10,000. 
D)  $13,000.

Question 7

Fred Pentell Company completes the following transactions
a. Mr. Pentell invests $5,500 cash in his company.
b. The company purchases equipment on account, $1600.
c. The company purchases additional equipment for cash, $600.
d. The company makes a payment on account for the equipment, $1,000.
Required: Record the above transactions in the basic accounting equation.
                                  Fred Pentell Company $$\begin{array}{l}
\text {}\
\begin{array} { l l l l  } 
&\text {ASSETS}&=\text {LIABILITIES}&+\text {PWNER`S EQUITY}\
\hline&\text {cash +equipment}&\text {accouint payable}&\text {F. Pentell, capital}\
\hline a.\
b.\c.\d.\total
\end{array}
\end{array}$$

Accepted Answer

The answer of Fred Pentell Company completes the following transactions
a....

Question 8

Not-for-profit business are not permitted to earn any revenue.

Accepted Answer

A) True 
 B)False

Question 9

Which two financial statements show results for a period of time?

Accepted Answer

A)  The Balance Sheet and the Statement of Owner's Equity 
B)  The Balance Sheet and the Income Statement 
C)  The Statement of Owner's Equity and the Income Statement 
D)  Only one statement shows results for a period of time

Question 10

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 bought inventory on credit. 
D)  The business bought supplies for cash.

Question 11

If the assets owned by a business total $50,000 and liabilities total $30,000, then owner's equity totals $80,000.

Accepted Answer

A) True 
 B)False

Question 12

Victoria received $500 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 $500. 
B)  increase Cash and decrease Accounts Receivable $500. 
C)  increase Cash and increase Accounts Receivable $500. 
D)  decrease Accounts Receivable and increase Victoria's Capital $500.

Question 13

Putting the information into the accounting system would be called

Accepted Answer

A)  analyzing. 
B)  recording. 
C)  classifying. 
D)  summarizing.

Question 14

Which of the following will be recorded in the owner's equity column as an increase?

Accepted Answer

A)  An exchange of assets 
B)  The purchase of an asset on credit 
C)  An investment by the owner 
D)  A withdrawal by the owner

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Which accounts are affected when the company buys supplies on account?

Accepted Answer

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

Question 17

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.

Question 18

Given the following account balances, determine the total liabilities. Cash $350, Accounts Receivable $275, Equipment $500 and Capital $900.

Accepted Answer

The answer of Given the following account balances, determine the...

Question 19

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.

Question 20

Which of the following would be considered a subdivision of owner's equity?

Accepted Answer

A)  Expenses 
B)  Cash 
C)  Assets 
D)  Liabilities

Exam 1: Accounting Concepts and Procedures: an Introduction

Total assets are included in the statement of owner's equity.

If a company's revenues are greater than its expenses, increasing its revenues and decreasing its expenses will

The income statement is prepared first so the information can be used to prepare the statement of owner's equity.

If total assets are $30,000 and total liabilities are $8,000, Capital must equal

Double-underlining is used for every sub-section on a Balance Sheet.

If total liabilities are $3,000 and total assets are $10,000, owner's equity must be

Not-for-profit business are not permitted to earn any revenue.

Which two financial statements show results for a period of time?

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

If the assets owned by a business total $50,000 and liabilities total $30,000, then owner's equity totals $80,000.

Victoria received $500 from customers in partial payment for accounting services performed previously. The recording of this transaction would

Putting the information into the accounting system would be called

Which of the following will be recorded in the owner's equity column as an increase?

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

Which accounts are affected when the company buys supplies on account?

The net income or net loss is calculated on the

Given the following account balances, determine the total liabilities. Cash $350, Accounts Receivable $275, Equipment $500 and Capital $900.

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

Which of the following would be considered a subdivision of owner's equity?