Question 1

Business transactions are expressed in terms of money.

Accepted Answer

A) True 
 B)False

Question 2

An owner can invest cash or other assets of value in the business.

Accepted Answer

A) True 
 B)False

Question 3

When a business pays a creditor on account,

Accepted Answer

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

Question 4

Clean and Fresh Laundromat has assets of $120,000 and liabilities of $35,000. Determine the amount of owner's equity.

Accepted Answer

A)   $42,500
B)   $155,000
C)   $85,000
D)   None of the answers listedE) B) and D)
F) B) and C)

Question 5

Capital represents the owner's investment, or equity, in a business.

Accepted Answer

A) True 
 B)False

Question 6

Match the terms below with the correct definitions.
-Company's asset account from which bills are paid

Accepted Answer

A)  Creditor
B)  Fundamental accounting equation
C)  Expenses
D)  Accounts
E)  Owner's equityF) Accounts receivableG) AssetH) CashI) Business entityJ) B) and E)
K) F) and G)

Question 7

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

Accepted Answer

A)  Creditor
B)  Fundamental accounting equation
C)  Expenses
D)  Accounts
E)  Owner's equityF) Accounts receivableG) AssetH) CashI) Business entityJ) F) and H)
K) A) and I)

Question 8

Which of the following is not considered an account?

Accepted Answer

A)   Equipment
B)   Revenues
C)   Accounts Payable
D)   Cash
E)   Accounts ReceivableF) None of the above
G) A) and B)

Question 9

When a company pays salaries to an assistant,

Accepted Answer

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

Question 10

Over a period of time, if total assets increase by $27,000 and total liabilities increase by $7,000, then owner's equity will be increased by

Accepted Answer

A)   $7,000.
B)   $34,000.
C)   $27,000.
D)   $20,000.
E)   none of these.F) A) and E)
G) A) and B)

Question 11

The deposit of cash by the owner in the name of the business would involve

Accepted Answer

A)   increasing an asset and increasing a liability.
B)   increasing an asset and increasing owner's equity.
C)   decreasing an asset and increasing owner's equity.
D)   increasing an asset and increasing revenue.E) All of the above
F) C) and D)

Question 12

Which of the following transactions does not include an increase to expenses?

Accepted Answer

A)   Received and paid the phone bill
B)   Paid monthly rent
C)   Received cash for services performed
D)   Paid the week's wages
E)   Bought advertising for cashF) A) and E)
G) A) and B)

Question 13

The _____________ is the official list of accounts for the business.

Accepted Answer

A)   chart of accounts
B)   account list
C)   account title
D)   fundamental accounting equationE) B) and D)
F) B) and C)

Question 14

What is the fundamental accounting equation, including examples of each item of the equation?

Accepted Answer

The answer of What is the fundamental accounting equation, including...

Question 15

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) C) and E)
G) A) and E)

Question 16

List and explain the four items under the umbrella of owner's equity, including whether it increases or decreases overall equity.

Accepted Answer

Investment − Owner provides an asset to ...

Question 17

A one-owner business is called a

Accepted Answer

A)   corporation.
B)   partnership.
C)   sole-ownership.
D)   sole-proprietorship.E) None of the above
F) A) and D)

Question 18

A withdrawal by the owner is recorded as a deduction from assets and an increase in expenses.

Accepted Answer

A) True 
 B)False

Question 19

Amounts owed by a business are referred to as

Accepted Answer

A)   assets.
B)   equities.
C)   liabilities.
D)   capital.
E)   expenses.F) None of the above
G) C) and D)

Question 20

Palmer Hand Clinic has the following accounts and balances: 
Cash, $2,350
Accounts Receivable, $280
Professional Equipment, $1,200
Office Equipment, $6,700
Accounts Payable, $4,380
P.Palmer, Capital, $2,000
Income from Services, $6,000
Rent Expense, $1,850
What is the amount of liabilities?

Accepted Answer

A)   $6,230
B)   $1,850
C)   $4,380
D)   $6,150E) A) and B)
F) All of the above

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

Over a period of time, if total assets increase by $27,000 and total liabilities increase by $7,000, then owner's equity will be increased by

Correct AnswerverifiedShow Answer

When a business pays a creditor on account,

Correct AnswerverifiedShow Answer

Capital represents the owner's investment, or equity, in a business.

Correct AnswerverifiedShow Answer

Amounts owed by a business are referred to as

Correct AnswerverifiedShow Answer

The purchase of an asset for cash will

Correct AnswerverifiedShow Answer

Clean and Fresh Laundromat has assets of $120,000 and liabilities of $35,000. Determine the amount of owner's equity.

Correct AnswerverifiedShow Answer

The _____________ is the official list of accounts for the business.

Correct AnswerverifiedShow Answer

Which of the following transactions does not include an increase to expenses?

Correct AnswerverifiedShow Answer

A one-owner business is called a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Palmer Hand Clinic has the following accounts and balances: Cash, $2,350 Accounts Receivable, $280 Professional Equipment, $1,200 Office Equipment, $6,700 Accounts Payable, $4,380 P.Palmer, Capital, $2,000 Income from Services, $6,000 Rent Expense, $1,850 What is the amount of liabilities?

Correct AnswerverifiedShow Answer

When a company pays salaries to an assistant,

Correct AnswerverifiedShow Answer

What is the fundamental accounting equation, including examples of each item of the equation?

Correct AnswerverifiedShow Answer

Business transactions are expressed in terms of money.

Correct AnswerverifiedShow Answer

Match the terms below with the correct definitions. -Company's asset account from which bills are paid

Correct AnswerverifiedShow Answer

A withdrawal by the owner is recorded as a deduction from assets and an increase in expenses.

Correct AnswerverifiedShow Answer

List and explain the four items under the umbrella of owner's equity, including whether it increases or decreases overall equity.

Correct AnswerverifiedInvestment − Owner provides an asset to ...View AnswerShow Answer

The deposit of cash by the owner in the name of the business would involve

Correct AnswerverifiedShow Answer

An owner can invest cash or other assets of value in the business.

Correct AnswerverifiedShow Answer

Which of the following is not considered an account?

Correct AnswerverifiedShow Answer

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Investment − Owner provides an asset to ...
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