practice exam for tracking expenses, liabilities, and equity

a company withdraws $15,000 of cash from the business for personal use. How does this transaction affect the accounting equation?

Assets and equity decrease both by 15k

what is the term for the money or assets given to the business by the owner or partners?

capital contributions

what is the term for the owner's rights to assets of the business after subtracting all of the liabilities?

equity

Which type of business has no owners, only founders or board members, and has net assets instead of equity?

nonprofit corporation

Selma owns a beauty salon and buys various products and supplies from different vendors. She records her purchases in her accounting system using either cash or accounts payable, depending on the payment terms. Which of the following statements is true about her purchases?

-Accounts payable purchases are recorded when Selma buys goods or services on credit card and will make payment in a future period -she increases her accounts payable (liability) with a credit and increases her expenses or assets w/ a debit -cash purchases are recorded when Selma pays for goods or services at the time of the purchase -she decreases her cash w/ a credit and increases her expenses or assets with a debit

which of the following forms is used by businesses to report payroll information on salaries, wags, tips, and taxes to the federal government quarterly?

-Form 941

A fitness company issues 500 shares of common stock for $10 each. How does this transaction affect the accounting equation?

-assets increase by 5k and equity increases by 5k issuing shares is an equity transaction that increases both assets (cash) and equity (share capital) by the same amount company receives cash from the investors and issues shares to them