Question 1

A corporation

Accepted Answer

A)   can continue indefinitely.
B)   is owned by stockholders.
C)   has limited risk to stockholders.
D)   all of the above.E) None of the above
F) B) and C)

Question 2

If a company's revenues are lower than its expenses, it will cause

Accepted Answer

A)   an increase in owner's equity.
B)   a decrease in owner's equity.
C)   an increase in assets.
D)   no effect on owner's equity.E) A) and C)
F) A) and B)

Question 3

Revenue, expenses, and withdrawals are subdivisions of

Accepted Answer

A)   assets.
B)   liabilities.
C)   owner's equity.
D)   All of these answers are correct.E) C) and D)
F) None of the above

Question 4

The purpose of accounting is to provide decision-makers with useful, accurate information.

Accepted Answer

A) True 
 B)False

Question 5

Hazy Shades received and paid a utility bill for $725 for the month of March. This transaction will

Accepted Answer

A)   increase Cash and increase Utility Expense.
B)   decrease Cash and increase Utility Expense.
C)   increase Cash and decrease Utility Expense.
D)   increase Utility Expense and decrease Withdrawal.E) A) and B)
F) C) and D)

Question 6

Owner's withdrawals

Accepted Answer

A)   decrease assets.
B)   increase expenses.
C)   increase liabilities.
D)   decrease withdrawals.E) All of the above
F) A) and C)

Question 7

Which of the following is NOT an asset?

Accepted Answer

A)   Cash
B)   Accounts Receivable
C)   Accounts Payable
D)   TruckE) A) and C)
F) None of the above

Question 8

Mark paid $500 cash to partially reduce the amount owed for equipment that was previously bought on account. This transaction would

Accepted Answer

A)   increase both assets and liabilities.
B)   increase assets and decrease liabilities.
C)   decrease both assets and liabilities.
D)   decrease assets and increase liabilities.E) A) and D)
F) A) and B)

Question 9

Which of the following would result if the business purchased supplies on credit?

Accepted Answer

A)   Supplies would increase and Cash would decrease.
B)   Supplies would increase and Capital would increase.
C)   Supplies would increase and Accounts Payable would increase.
D)   The purchase of supplies is not a business transaction.E) B) and C)
F) A) and D)

Question 10

A business paid $5,800 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

Accepted Answer

A)   increase one asset, decrease another asset.
B)   increase an asset, increase a liability.
C)   decrease an asset, decrease a liability.
D)   increase an asset, increase owner's equity.E) A) and C)
F) C) and D)

Question 11

The purchase of equipment with both cash and on account was recorded as only a credit purchase. Due to this error

Accepted Answer

A)   assets would be understated.
B)   liabilities would be overstated.
C)   owner's equity would be overstated.
D)   None of the above are correct.E) All of the above
F) None of the above

Question 12

J.R. Tenten's investment of cash and equipment in her existing business will

Accepted Answer

A)   decrease assets and increase a liability.
B)   increase assets and liabilities.
C)   decrease assets and increase owner's equity.
D)   increase assets and owner's equity.E) None of the above
F) B) and C)

Question 13

If the beginning capital was $14,000 and in a fiscal period there was revenue of $8,000, withdrawals of $3,000, and expenses of $1,500 then the ending capital would be

Accepted Answer

A)   $26,500.
B)   $23,500.
C)   $17,500.
D)   $20,500.E) None of the above
F) B) and D)

Question 14

A sole proprietorship ends with the death of the owner.

Accepted Answer

A) True 
 B)False

Question 15

The financial statement that shows revenue and expenses for a period of time is the

Accepted Answer

A)   balance sheet.
B)   income statement.
C)   statement of owner's equity.
D)   statement of cash flows.E) C) and D)
F) A) and B)

Question 16

The left side of the accounting equation must always equal the right side of the equation.

Accepted Answer

A) True 
 B)False

Question 17

The claims of creditors against the assets of a business are

Accepted Answer

A)   expenses.
B)   revenues.
C)   liabilities.
D)   owner's equity.E) C) and D)
F) All of the above

Question 18

Discuss the advantages and disadvantages of sole proprietorships, partnerships and corporations.

Accepted Answer

A sole proprietorship is a business that...

Question 19

The balance sheet shows the company's financial position as of a particular date.

Accepted Answer

A) True 
 B)False

Question 20

What three elements make up a balance sheet?

Accepted Answer

A)   Liabilities, expenses, and owner's equity
B)   Assets, liabilities, and revenues
C)   Debts, assets, and cash
D)   Assets, liabilities, and owner's equityE) A) and C)
F) A) and B)

Exam 1: Accounting Concepts and Procedures: an Introduction

The balance sheet shows the company's financial position as of a particular date.

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The purchase of equipment with both cash and on account was recorded as only a credit purchase. Due to this error

Correct AnswerverifiedShow Answer

Which of the following would result if the business purchased supplies on credit?

Correct AnswerverifiedShow Answer

If a company's revenues are lower than its expenses, it will cause

Correct AnswerverifiedShow Answer

Which of the following is NOT an asset?

Correct AnswerverifiedShow Answer

A corporation

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If the beginning capital was $14,000 and in a fiscal period there was revenue of $8,000, withdrawals of $3,000, and expenses of $1,500 then the ending capital would be

Correct AnswerverifiedShow Answer

J.R. Tenten's investment of cash and equipment in her existing business will

Correct AnswerverifiedShow Answer

A business paid $5,800 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

Correct AnswerverifiedShow Answer

Hazy Shades received and paid a utility bill for $725 for the month of March. This transaction will

Correct AnswerverifiedShow Answer

The left side of the accounting equation must always equal the right side of the equation.

Correct AnswerverifiedShow Answer

The purpose of accounting is to provide decision-makers with useful, accurate information.

Correct AnswerverifiedShow Answer

Discuss the advantages and disadvantages of sole proprietorships, partnerships and corporations.

Correct AnswerverifiedA sole proprietorship is a business that...View AnswerShow Answer

Revenue, expenses, and withdrawals are subdivisions of

Correct AnswerverifiedShow Answer

The financial statement that shows revenue and expenses for a period of time is the

Correct AnswerverifiedShow Answer

Mark paid $500 cash to partially reduce the amount owed for equipment that was previously bought on account. This transaction would

Correct AnswerverifiedShow Answer

Owner's withdrawals

Correct AnswerverifiedShow Answer

A sole proprietorship ends with the death of the owner.

Correct AnswerverifiedShow Answer

What three elements make up a balance sheet?

Correct AnswerverifiedShow Answer

The claims of creditors against the assets of a business are

Correct AnswerverifiedShow Answer

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A sole proprietorship is a business that...
View Answer

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