ACC223- Exam 1

The recording of financial transactions and events manually or electronically is called which of the following? A) Bookkeeping B) Budgeting C) Auditing D) Reporting E) A and B

A) Bookkeeping

If during the accounting period the assets increased by $14,000, and equity increased by $4,000, then how did liabilities change? A) Increased by $10,000 B) Increased by $4,000 C) Decreased by $4,000 D) Decreased by $10,000 E) Decreased by $18,000

A) Increased by $10,000

An accountant has the responsibility to coordinate the annual budget processes of the business corporation she works for. In which of the following areas of accounting is she most likely to be employed? A) Managerial accounting. B) Public accounting. C) Financial accounting. D) Not-for-Profit accounting. E) Auditing.

A) Managerial Accounting

The investment of cash in the business will result in which of the following? A) An increase in cash and a decrease in equity B) An increase in cash and an increase in equity C) A decrease in cash and a decrease in liabilities D) An increase in fees earned and an increase in equity E) An increase in cash and an increase in liabilities

B) An Increase in cash and an increase in Equity

When cash is received from a customer in payment for an account receivable, how are the elements of the accounting equation affected? A) Decrease assets (cash and increase assets (accounts receivable) B) Increase assets (cash) and decrease assets (accounts receivable) C) Increase assets and increase liabilities D) Increase assets and increase equity E) None of the above

B) Increase assets (cash) and decrease assets (accounts receivable)

Services rendered for which cash has not yet been received will have what effect on the components of the accounting equation? A) Increase in accounts receivable and a decrease in equity B) Increase in accounts receivable and an increase in equity C) Decrease in accounts receivable and an increase in equity D) Increase in fees earned and a decrease in equity E) Decrease in accounts receivable and a decrease in equity

B) Increase in accounts receivable and an increase in equity

If during the accounting period the assets decreased by $10,000, and equity increased by $2,000, then how did liabilities change? A) Increased by $12,000 B) Increased by $8,000 C) Decreased by $12,000 D) Decreased by $8,000 E) Decreased by $6,000

C) Decrease by $12,000

Purchasing equipment on account will have what effect on the components of the accounting equation? A) Increase in equipment and a decrease in equity B) Increase in equipment and an increase in equity C) Increase in equipment and an increase in liabilities D) Increase in equipment and a decrease in liabilities E) None of the above

C) Increase in equipment and Increase in liabilities

Beginning capital was $10,000. Withdrawals were $24,000. The owner made additional investments during year of $60,000. The ending capital balance was $90,000. What was the net income or net loss for the period? A) Net income, $56,000 B) Net loss, $44,000 C) Net income, $44,000 D) Net income, $30,000 E) None of the above

C) Net Income, $44,000

If at the end of the accounting period the liabilities total $18,000, and equity totals $32,000, then what must be the total of the assets? A) $14,000 B) $18,000 C) $32,000 D) $50,000 E) None of the above

D) $50,000

Assets total $100,000 and liabilities total $20,000. What is the equity of the business? A) $80 B) $800 C) $8,000 D) $80,000 E) None of the above

D) $80,000

Keith Farfalle withdrew $5,000 from his pet store, KM's Pets. Recording the withdrawal will result in which of the following changes to the components of the accounting equation? A) Increase in an asset and increase a liability B) Decrease in an asset and decrease a liability C) Increase in an asset and increase in equity D) Decrease in an asset and decrease in equity E) Increase in one asset and decrease in another asset

D) Decrease in an asset and decrease in equity

Which form of ownership burdens owners with the greatest risk of loss of their personal assets? A) Limited partnership (LP) B) Limited liability partnership (LLP) C) Corporation D) Sole proprietorship E) None of the above

D) Sole Proprietorship

Which of the following organizations is responsible for setting accounting rules and regulations? A) H&R Block B) SEC C) IRS D) AICPA E) FASB

E) FASB

The total assets and total liabilities of a firm are reported on which of the following? A) Income statement B) Balance sheet C) Statement of cash flows D) Statement of owner's equity E) None of the above

E) None of the Above

Withdrawals increase equity. True or False

False

Total revenues were $105,000, total expenses, except for wage expense were $50,000, and net income was $35,000. What was the amount of wage expense? A) $15,000 B) $20,000 C) $55,000 D) $70,000 E) Cannot be determined from information provided

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