Question 1

Bonnie's Baskets purchases $3,000 worth of office equipment on open account. This causes:

Accepted Answer

A)   Cash and Capital to decrease.
B)   Office Equipment and Accounts Payable to increase.
C)   Office Equipment to decrease and Accounts Payable to increase.
D)   Accounts Payable to increase and Capital to decrease.E) A) and C)
F) A) and B)

Question 2

Mike's Photography completes the following transactions:
a. Mike invests $15,000 cash in her company.
b. The company purchases equipment on account, $600.
c. The company purchases additional equipment for cash, $300.
d. The company makes a payment on account for the equipment, $500.
Required: Record the above transactions in the basic accounting equation.

Accepted Answer

The answer of Mike's Photography completes the following transactions:
a. Mike...

Question 3

If total liabilities increased by $10,000 and the assets increased by $10,000 during the accounting period, what is the change in the owner's equity amount?

Accepted Answer

A)   No effect on owner's equity
B)   Decrease of $10,000
C)   Increase of $20,000
D)   Decrease of $40,000E) A) and B)
F) A) and C) A

Question 4

Cash withdrawals by the owner increase both equity and Liabilities.

Accepted Answer

A) True 
 B)False

Question 5

Expenses are recorded as costs of doing business whether cash was paid or not for Expenses.

Accepted Answer

A) True 
 B)False

Question 6

Katie's Vegetarian Restaurant, with total Assets of $121,000, borrows $27,000 from the bank. Which of the following is a true statement upon borrowing the money?

Accepted Answer

A)   Total Assets are now $148,000.
B)   Total Assets are now $94,000.
C)   Total Assets are now $175,000.
D)   Total Assets are now $121,000.E) A) and B)
F) A) and C) A

Question 7

Assets are equal to:

Accepted Answer

A)   Liabilities + Owner's Equity.
B)   Liabilities - Owner's Equity.
C)   Liabilities - Revenues.
D)   Revenues - Expenses.E) B) and C)
F) None of the above

Question 8

Determine the beginning capital balance of a business having an ending capital balance of $10,800, no additional investments, withdrawals of $2,600, and a net income of $4,700.
$ ________

Accepted Answer

$8,700 [$1...

Question 9

Creditors' claims against Assets are called Liabilities.

Accepted Answer

A) True 
 B)False

Question 10

The type of business organization that can continue indefinitely is known as a:

Accepted Answer

A)   corporation.
B)   partnership.
C)   sole proprietorship.
D)   All of the aboveE) All of the above
F) C) and D)

Question 11

Which of the following is a characteristic of a sole proprietorship?

Accepted Answer

A)   Business owned by more than one person
B)   Easy to form
C)   Each stockholder acts as an owner of the company
D)   Can continue indefinitelyE) All of the above
F) A) and D)

Question 12

Record the following transactions in the basic accounting equation:
a. Brian invests $30,000 cash to begin an accounting service.
b. The company buys office furniture for cash, $900.
c. The company buys additional office furniture on account, $200.
d. The company makes a payment on the office furniture, $100.

Accepted Answer

Brian's Ac...

Question 13

If Ol' Fashioned Toys' Revenues are greater than its Expenses during the accounting period:

Accepted Answer

A)   Assets will increase more than Liabilities.
B)   Liabilities will increase more than Assets.
C)   the business will incur a loss.
D)   the business will earn a net income.E) None of the above
F) A) and B)

Question 14

A partnership is a business which:

Accepted Answer

A)   is easy to form.
B)   ends with the death of a partner.
C)   is owned by more than one person.
D)   All of these answers are correct.E) B) and C)
F) C) and D)

Question 15

The increase or decrease in Cash is reported on the:

Accepted Answer

A)   income statement.
B)   statement of Owner's Equity.
C)   balance sheet.
D)   All of these are correct.E) B) and D)
F) None of the above

Question 16

Owner investment is considered Revenue for the business.

Accepted Answer

A) True 
 B)False

Question 17

An Expense should be recorded when:

Accepted Answer

A)   the bill is paid.
B)   a purchase is made on credit.
C)   a bill is received in the mail.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 18

Ryan withdrew cash from the business to pay his personal cell phone bill. The expanded accounting equation changes include:

Accepted Answer

A)   increase in both Cash and Withdrawals.
B)   decrease in both Cash and Withdrawals.
C)   decrease in Cash and increase in Withdrawals.
D)   increase in Cash and decrease in Withdrawals.E) A) and B)
F) All of the above

Question 19

Revenue is the same thing as cash.

Accepted Answer

A) True 
 B)False  False

Question 20

Strum Hardware has total Assets of $60,000. What are the total Assets if new building is purchased for $5,000 cash?

Accepted Answer

A)   $70,000
B)   $65,000
C)   $55,000
D)   $60,000E) A) and D)
F) C) and D)

Exam 1: Accounting Concepts and Procedures

Bonnie's Baskets purchases $3,000 worth of office equipment on open account. This causes:

Correct Answer
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Correct Answer
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If total liabilities increased by $10,000 and the assets increased by $10,000 during the accounting period, what is the change in the owner's equity amount?

Correct Answer
verified
A

Cash withdrawals by the owner increase both equity and Liabilities.

Correct Answer
verified

Expenses are recorded as costs of doing business whether cash was paid or not for Expenses.

Correct Answer
verified

Katie's Vegetarian Restaurant, with total Assets of $121,000, borrows $27,000 from the bank. Which of the following is a true statement upon borrowing the money?

Correct Answer
verified
A

Assets are equal to:

Correct Answer
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Determine the beginning capital balance of a business having an ending capital balance of $10,800, no additional investments, withdrawals of $2,600, and a net income of $4,700. $ ________

Correct Answer
verified
$8,700 [$1...
View Answer

Creditors' claims against Assets are called Liabilities.

Correct Answer
verified

The type of business organization that can continue indefinitely is known as a:

Correct Answer
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Which of the following is a characteristic of a sole proprietorship?

Correct Answer
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Correct Answer
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Brian's Ac...
View Answer

If Ol' Fashioned Toys' Revenues are greater than its Expenses during the accounting period:

Correct Answer
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A partnership is a business which:

Correct Answer
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The increase or decrease in Cash is reported on the:

Correct Answer
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Owner investment is considered Revenue for the business.

Correct Answer
verified

An Expense should be recorded when:

Correct Answer
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Ryan withdrew cash from the business to pay his personal cell phone bill. The expanded accounting equation changes include:

Correct Answer
verified

Revenue is the same thing as cash.

Correct Answer
verified
False

Strum Hardware has total Assets of $60,000. What are the total Assets if new building is purchased for $5,000 cash?

Correct Answer
verified

Exam 1: Accounting Concepts and Procedures

Bonnie's Baskets purchases $3,000 worth of office equipment on open account. This causes:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If total liabilities increased by $10,000 and the assets increased by $10,000 during the accounting period, what is the change in the owner's equity amount?

Correct AnswerverifiedA

Cash withdrawals by the owner increase both equity and Liabilities.

Correct AnswerverifiedShow Answer

Expenses are recorded as costs of doing business whether cash was paid or not for Expenses.

Correct AnswerverifiedShow Answer

Katie's Vegetarian Restaurant, with total Assets of $121,000, borrows $27,000 from the bank. Which of the following is a true statement upon borrowing the money?

Correct AnswerverifiedA

Assets are equal to:

Correct AnswerverifiedShow Answer

Determine the beginning capital balance of a business having an ending capital balance of $10,800, no additional investments, withdrawals of $2,600, and a net income of $4,700. $ ________

Correct Answerverified$8,700 [$1...View AnswerShow Answer

Creditors' claims against Assets are called Liabilities.

Correct AnswerverifiedShow Answer

The type of business organization that can continue indefinitely is known as a:

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of a sole proprietorship?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedBrian's Ac...View AnswerShow Answer

If Ol' Fashioned Toys' Revenues are greater than its Expenses during the accounting period:

Correct AnswerverifiedShow Answer

A partnership is a business which:

Correct AnswerverifiedShow Answer

The increase or decrease in Cash is reported on the:

Correct AnswerverifiedShow Answer

Owner investment is considered Revenue for the business.

Correct AnswerverifiedShow Answer

An Expense should be recorded when:

Correct AnswerverifiedShow Answer

Ryan withdrew cash from the business to pay his personal cell phone bill. The expanded accounting equation changes include:

Correct AnswerverifiedShow Answer

Revenue is the same thing as cash.

Correct AnswerverifiedFalse

Strum Hardware has total Assets of $60,000. What are the total Assets if new building is purchased for $5,000 cash?

Correct AnswerverifiedShow Answer

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A

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A

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$8,700 [$1...
View Answer

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Brian's Ac...
View Answer

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False

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