Question 1

R. Ronald withdrew $50,000 from the business. This transaction should be recorded as a(n)

Accepted Answer

A)  increase to assets.
B)  decrease to owner's equity.
C)  increase to liabilities.
D)  increase to owner's equity.E) C) and D)
F) All of the above

Question 2

Which of the following equations is the fundamental accounting equation?

Accepted Answer

A)  Assets - Liabilities = Owner's Equity
B)  Assets = Liabilities + Owner's Equity
C)  Assets + Liabilities = Owner's Equity
D)  Assets - Owner's Equity = Liabilities
E)  Assets + Owner's Equity = LiabilitiesF) A) and E)
G) C) and D)

Question 3

The borrowing of money will

Accepted Answer

A)  increase owner's equity.
B)  decrease assets.
C)  decrease liabilities.
D)  increase liabilities.E) A) and B)
F) A) and C)

Question 4

Pidcoke Company sold services on account, $23,000. This transactions should be recorded as a(n)

Accepted Answer

A)  increase to cash.
B)  decrease to revenue.
C)  increase to accounts receivable.
D)  increase to accounts payable.E) C) and D)
F) B) and C)

Question 5

S. Storm has $20,000 invested in his business and the business owes creditors $8,000. Determine the amount of assets in the business.

Accepted Answer

A)  $28,000
B)  $12,000
C)  $14,000
D)  None of the answers listedE) B) and C)
F) B) and D)

Question 6

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

Accepted Answer

A)  Assets increase; liabilities, no effect; owner's equity increases.
B)  Assets decrease; liabilities, no effect; owner's equity increases.
C)  Assets increase; liabilities, no effect; owner's equity decreases.
D)  Assets increase; liabilities, increase; owner's equity, no effect.E) None of the above
F) A) and B)

Question 7

Which of the following is true?

Accepted Answer

A)  Double-entry accounting requires that each transaction be recorded in at least one account.
B)  Every transaction is recorded as an increase and/or decrease in two or more accounts.
C)  Double-entry accounting requires that each transaction be recorded in only two accounts.
D)  After a transaction has been recorded it is acceptable for the accounting equation to be out of balance.E) C) and D)
F) A) and B)

Question 8

Wages Expense is a(n)

Accepted Answer

A)  asset.
B)  liability.
C)  revenue.
D)  expense.E) A) and C)
F) All of the above

Question 9

The expanded accounting equation is

Accepted Answer

A)  assets = liabilities + capital + drawing + revenue - expenses
B)  assets = liabilities - capital + drawing - revenue + expenses
C)  assets = liabilities + capital - drawing + revenue - expenses
D)  assets + capital = liabilities - drawing + revenue - expensesE) C) and D)
F) All of the above

Question 10

The purchase of supplies for cash will

Accepted Answer

A)  increase Supplies and decrease Cash.
B)  increase Supplies Expense and decrease Cash.
C)  decrease Cash and increase Accounts Payable.
D)  increase Supplies Expense and increase Accounts Payable.
E)  decrease Cash and increase Capital.F) C) and E)
G) C) and D)

Question 11

Every transaction is recorded in terms of increases and/or decreases in two or more accounts.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not considered an account?

Accepted Answer

A)  Equipment
B)  Revenues
C)  Accounts Payable
D)  Cash
E)  Accounts ReceivableF) A) and B)
G) B) and C)

Question 13

The _____________ means that a business is separated from its owners.

Accepted Answer

A)  stand-alone entity concept
B)  equity concept
C)  separate entity concept
D)  fair value concept
E)  none of the answers listedF) B) and C)
G) A) and D)

Question 14

A business received $600 cash from charge customers to apply on account. The effect of the transaction is an increase in an asset and a(n)

Accepted Answer

A)  increase in revenue.
B)  decrease in capital.
C)  decrease in a liability.
D)  decrease in an asset.
E)  increase in capital.F) A) and B)
G) C) and D)

Question 15

Match the terms below with the correct definitions.
 
-Categories under the main headings Assets, Liabilities, Owner's Equity

Accepted Answer

The answer of Match the terms below with the correct...

Question 16

Match the terms below with the correct definitions.
 
-One to whom money is owed

Accepted Answer

The answer of Match the terms below with the correct...

Question 17

Explain the separate entity concept, including why it is important to accounting.

Accepted Answer

This concept means that a busi...

Question 18

The purchase of an asset for cash will

Accepted Answer

A)  increase total assets and decrease total liabilities.
B)  have no effect on total assets or total liabilities.
C)  increase total assets and increase total liabilities.
D)  increase total assets and increase total owner's equity.
E)  increase total assets and decrease total owner's equity.F) A) and E)
G) A) and D)

Question 19

Liabilities represent amounts owed to creditors.

Accepted Answer

A) True 
 B)False

Question 20

The account ____________ is used to record amounts due from charge customers.

Accepted Answer

A)  cash
B)  accounts payable
C)  accounts receivable
D)  revenueE) C) and D)
F) A) and B)

Exam 1: Asset, Liability, Owners Equity, Revenue, and Expense Accounts

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

Correct AnswerverifiedShow Answer

A business received $600 cash from charge customers to apply on account. The effect of the transaction is an increase in an asset and a(n)

Correct AnswerverifiedShow Answer

Explain the separate entity concept, including why it is important to accounting.

Correct AnswerverifiedThis concept means that a busi...View AnswerShow Answer

Wages Expense is a(n)

Correct AnswerverifiedShow Answer

The _____________ means that a business is separated from its owners.

Correct AnswerverifiedShow Answer

Which of the following is not considered an account?

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

The purchase of an asset for cash will

Correct AnswerverifiedShow Answer

The expanded accounting equation is

Correct AnswerverifiedShow Answer

Match the terms below with the correct definitions. -Categories under the main headings Assets, Liabilities, Owner's Equity

Correct AnswerverifiedShow Answer

The account ____________ is used to record amounts due from charge customers.

Correct AnswerverifiedShow Answer

The borrowing of money will

Correct AnswerverifiedShow Answer

S. Storm has $20,000 invested in his business and the business owes creditors $8,000. Determine the amount of assets in the business.

Correct AnswerverifiedShow Answer

Liabilities represent amounts owed to creditors.

Correct AnswerverifiedShow Answer

The purchase of supplies for cash will

Correct AnswerverifiedShow Answer

Pidcoke Company sold services on account, $23,000. This transactions should be recorded as a(n)

Correct AnswerverifiedShow Answer

Which of the following equations is the fundamental accounting equation?

Correct AnswerverifiedShow Answer

R. Ronald withdrew $50,000 from the business. This transaction should be recorded as a(n)

Correct AnswerverifiedShow Answer

Match the terms below with the correct definitions. -One to whom money is owed

Correct AnswerverifiedShow Answer

Every transaction is recorded in terms of increases and/or decreases in two or more accounts.

Correct AnswerverifiedShow Answer

Correct Answer
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This concept means that a busi...
View Answer

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