ACC - chapter 1
b
QN=11 Provide descriptions for this transaction: Debit office supplies $8,000 and credit liability $,8000 a. Buying office supplies by cash $8,000 b. Buying office supplies on credit $8,000 c. Arrange office supplies contract on credit $8,000 d. Arrange office supplies contract by cash $8,000 e. None of these
d
QN=35 Net Income: a. Decreases equity. b. Represents the amount of assets owners put into a business. c. Equals assets minus liabilities. d. Is the excess of revenues over expenses. e. Represents owners' claims against assets.
c
QN=41 Another name for equity is: a. Net income. b. Expenses. c. Net asset. d. Revenue. e. Net loss.
d
QN=42 On June 30 of the current year, the assets and liabilities of Phoenix Phildell are as follows: Cash $20,500, Accounts Receivable, $7,250, Supplies, $650, Equipment, $12,000, Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year? a. $8,300 b. $13,050 c. $20,500 d. $31,100 e. $40,400
e
QN=48 Creditors' claims on the assets of a company are called: a. Net losses. b. Expenses. c. Revenues. d. Equity. e. Liabilities.
b
QN=19 Which of the following is a liability? a. Account receivable b. Account payable c. Owner's capital d. Owner's withdrawal e. None of these
b
QN=2 A cash outflow from the company into its owner is called a(n): a. Liability. b. Withdrawal. c. Expense. d. Profit. e. Investment.
c
QN=20 If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity? a. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000. b. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000. c. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would not change. d. There would be no effect on the accounts because the accounts are affected by the same amount. e. None of these.
b
QN=21 Assets created by selling goods and services on credit are: a. Accounts payable. b. Accounts receivable. c. Liabilities. d. Expenses e. Equity.
b
QN=22 A payment to an owner for personal use is called a(n): a. Liability. b. Withdrawal. c. Expense. d. Contribution. e. Investment.
c
QN=23 The properties used in operation activities of a business is called: a. Revenue b. Withdrawal c. Assets d. Expense e. Liabilities
a
QN=24 Which of the following is a liability? a. Note payable b. Note receivable c. Cash d. Inventory e. Expense
c
QN=25 Which of the following is not considered as subcategory of owner's Equity? a. Revenue b. Withdrawal c. Assets d. Expense e. Contributed capital
e
QN=26 Which of the following is not a liability? a. Account payable b. Note payable c. Short term loan d. Long term loan e. Short term investment
a
QN=27 Which of the following is not a category or element of the balance sheet? a. Expense b. Liabilities c. Assets d. Account payable e. Loan
b
QN=28 The account used to record the transfers of assets from a business to its owner is: a. A revenue account. b. The owner's withdrawals account. c. The owner's capital account. d. An expense account. e. A liability account.
a
QN=29 Reflects assumption that the business will continue operating instead of being closed or sold. It is about: a. Going-Concern Assumption b. Business Entity Assumption c. Time Period Assumption d. Revenue Recognition Principle e. Cost Principle
a
QN=3 Liability created by purchasing goods and services on credit are: a. Accounts payable. b. Accounts receivable. c. Liabilities. d. Expenses. e. Equity.
d
QN=30 A company must record its expenses incurred to generate the revenue reported at the same period. It is about: a. Going-Concern Assumption b. Business Entity Assumption c. Time Period Assumption d. Matching Principle e. Cost Principle
a
QN= 45 If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have: a. Increased $22,000. b. Decreased $22,000. c. Increased $89,000. d. Decreased $156,000. e. Increased $156,000.
b
QN= 47 The following transactions occurred during July: 1. Received $900 cash for services provided to a customer during July. 2. Received $2,200 cash investment from Barbara Hanson, the owner of the business. 3. Received $750 from a customer in partial payment of his account receivable which arose from sales in June. 4. Provided services to a customer on credit, $375. 5. Borrowed $6,000 from the bank by signing a promissory note. 6. Received $1,250 cash from a customer for services to be rendered next year. What was the amount of revenue for July? a. $ 900. b. $ 1,275. c. $ 2,525. d. $ 3,275. e. $11,100.
b
QN=1 If assets are $199,000 and liabilities are $132,000, then equity equals a. $32,000. b. $67,000. c. $99,000. d. $131,000. e. $198,000.
b
QN=10 Provide descriptions for this transaction: Increase cash $4,000 and Increase CONTRIBUTED CAPITAL $4000 a. Investment of cash in business by owner or performed services for cash b. Investment of cash in business by owner c. Performed services for cash d. Collected cash from customers e. None of these
a
QN=12 Provide descriptions for this transaction: Decrease cash $3500 and Decrease equity $3500 a. Withdraw cash from the business by owner or paid cash for an expense b. Withdraw cash from the business by owner c. paid cash for an expense d. Collected cash from customers e. None of these
b
QN=13 Items used in business operations, such as office pens and paper are several samples of: a. Office expense b. Office supplies c. Office equipment d. Prepayment e. None of these
c
QN=14 The difference between a company's assets and its liabilities, or net assets is: a. Net income. b. Expense. c. Equity. d. Revenue. e. Net loss.
a
QN=15 Resources owned or controlled by a company that are expected to yield future benefits are: a. Assets. b. Revenues. c. Liabilities. d. Owner's Equity. e. Expenses.
e
QN=16 Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation? a. Assets increase by $75,000 and expenses increase by $75,000. b. Assets increase by $75,000 and expenses decrease by $75,000. c. Liabilities increase by $75,000 and expenses decrease by $75,000. d. Assets decrease by $75,000 and expenses decrease by $75,000. e. Assets increase by $75,000 and liabilities increase by $75,000.
b
QN=17 Internal users of accounting information include: a. Shareholders. b. Managers. c. Lenders. d. Suppliers. e. Customers.
a
QN=18 A chart of accounts generally starts with which of the following types of accounts? a. Asset accounts b. Liability accounts c. Expense accounts d. Equity accounts e. Revenue accounts
b
QN=31 Which is the assumption stating that A business is accounted for separately from other business entities, including its owner? a. Going-Concern Assumption b. Business Entity Assumption c. Time Period Assumption d. Matching Principle e. Cost Principle
d
QN=32 Which are expected to be sold, collected or used within one year or the company's operating cycle? a. Non - Current assets b. Non - Current liabilities c. Current liabilities d. Current assets e. None of these
d
QN=33 Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is: a. $223,000. b. $240,000. c. $268,000. d. $274,000. e. $208,000.
e
QN=34 Which of the following statements is true about assets? a. They are economic resources owned or controlled by the business. b. They are expected to provide future benefits to the business. c. They appear on the balance sheet. d. Claims on them can be shared between creditors and owners. e. All of these.
d
QN=36 Decreases in equity that represent costs of assets or services used to earn revenues are called: a. Liabilities. b. Equity. c. Withdrawals. d. Expenses. e. Owner's Investment.
e
QN=37 Accounting is an information and measurement system that: a. Identifies business activities. b. Records business activities. c. Communicates business activities. d. Helps people make better decisions. e. All of these.
c
QN=38 Which of the following accounting principles would require that all goods and services purchased should be recorded at cost? a. Going-concern principle. b. Continuing-concern principle. c. Cost principle. d. Business entity principle. e. Consideration principle.
e
QN=39 External users of accounting information include: a. Shareholders. b. Customers. c. Creditors. d. Government regulators. e. All of these.
b
QN=4 Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation? a. Assets, $30,000 increase, liabilities, no effect, equity, $30,000 increase. b. Assets, $30,000 decrease, liabilities, $30,000 decrease, equity, no effect. c. Assets, $30,000 decrease, liabilities, $30,000 increase, equity, no effect. d. Assets, no effect, liabilities, $30,000 decrease, equity, $30,000 increase. e. Assets, $30,000 decrease, liabilities, no effect, equity $30,000 decrease.
b
QN=40 The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the: a. Income statement equation. b. Accounting equation. c. Business equation. d. Net income. e. Trial balance. f. Balance sheet.
a
QN=43 Accounts receivable refers: a. A promise from customer for service or product the company provided on credit b. A prepayment of future expense c. A prepayment of customer for service to be provided in future d. Money which is owed to a provider by the company e. Investment by owner
d
QN=44 Money which a company owes to vendors for products and services purchased on credit. This item appears on the company's balance sheet as a current liability. a. Prepayment b. Account receivable c. Asset d. Account payable e. Cost of goods sold
a
QN=46 If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period, what was the effect on the assets? a. Assets would have increased $55,000. b. Assets would have decreased $55,000. c. Assets would have increased $19,000. d. Assets would have decreased $19,000. e. None of these.
a
QN=49 Distributions by a business to its owners are called: a. Withdrawals. b. Expenses. c. Assets. d. Retained earnings. e. Net Income.
d
QN=5 How does Lead Company record by the billing of a client for $15,000 of service completed? a. +$15,000 accounts receivable, -$15,000 accounts payable. b. +$15,000 accounts receivable, +$15,000 accounts payable. c. +$15,000 accounts receivable, +$15,000 cash. d. +$15,000 accounts receivable, +$15,000 revenue. e. +$15,000 accounts receivable, -$15,000 revenue.
d
QN=50 How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed? a. +$10,000 accounts receivable, -$10,000 accounts payable. b. +$10,000 accounts receivable, +$10,000 accounts payable. c. +$10,000 accounts receivable, +$10,000 cash. d. +$10,000 accounts receivable, +$10,000 revenue. e. +$10,000 accounts receivable, -$10,000 revenue.
d
QN=6 Moffat Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. What is the entry need to record when Moffat Company bill of a client for $25,000 of contract completed? a. +$25,000 accounts receivable, -$25,000 accounts payable. b. +$25,000 accounts receivable, +$25,000 accounts payable. c. +$25,000 accounts receivable, +$25,000 cash. d. +$25,000 accounts receivable, +$25,000 revenue. e. +$25,000 accounts receivable, -$25,000 revenue.
a
QN=7 The balance in the prepaid insurance account before adjustment at the end of the year is $4,800, which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is: a. Debit Insurance Expense, $2,400, credit Prepaid Insurance, $2,400. b. Debit Prepaid Insurance, $2,400, credit Insurance Expense, $2,400. c. Debit Insurance Expense, $1,200, credit Prepaid Insurance, $1,200. d. Debit Prepaid Insurance, $1,200, credit Insurance Expense, $1,200 e. Debit Cash, $4,800, Credit Prepaid Insurance, $4,800.
b
QN=8 A company might buy a service or product on credit. "On credit" implies that the cash payment will occur: a. On buying day b. on a later date c. on previous day d. No due date e. No obligation to pay
a
QN=9 Provide descriptions for this transaction: Increase cash $1,000 and Increase equity $,1000 a. Investment of cash in business by owner or performed services for cash b. Investment of cash in business by owner c. Performed services for cash d. Collected cash from customers e. None of these
