Question 1

The net income or net loss is calculated on the:

Accepted Answer

A)   balance sheet.
B)   statement of Owner's Equity.
C)   income statement.
D)   None of theseE) C) and D)
F) A) and B)

Question 2

Victoria received $1,000 from customers in partial payment for accounting services performed previously. The recording of this transaction would:

Accepted Answer

A)   increase Cash and Victoria's Capital $1,000.
B)   increase Cash and decrease Accounts Receivable $1,000.
C)   increase Cash and increase Accounts Receivable $1,000.
D)   decrease Accounts Receivable and increase Victoria's Capital $1,000.E) A) and B)
F) A) and C)

Question 3

Which accounts are affected when the company pays salaries?

Accepted Answer

A)   Assets and Capital
B)   Liabilities and Revenue
C)   Assets and Expenses
D)   None of the above is correct.E) None of the above
F) B) and D)

Question 4

The purchase of supplies with both cash and on account was recorded as only an open account 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 is correct.E) B) and D)
F) A) and D)

Question 5

Which of the following would result if a business purchased Equipment with a 40% down payment and the rest on open account?

Accepted Answer

A)   Equipment would increase and Cash would decrease.
B)   Accounts Payable would increase.
C)   Since the equipment has not been paid in full, there is nothing to record.
D)   Both A and B are correct.E) All of the above
F) A) and B)

Question 6

The Sarbanes-Oxley Act was passed to:

Accepted Answer

A)   prevent financial statement fraud at public companies.
B)   replace inventory accounting procedures.
C)   improve the accuracy of the company's financial reporting.
D)   Both A and C are correct.E) A) and C)
F) All of the above

Question 7

Cup's Inc. paid $15,000 in salaries and wages for February. This transaction will:

Accepted Answer

A)   increase Expenses and decrease Revenue.
B)   increase Expenses and increase Liabilities.
C)   decrease Assets and increase Expenses.
D)   increase Assets and Expenses.E) C) and D)
F) A) and D)

Question 8

Expenses:

Accepted Answer

A)   are costs the company incurs in carrying on operations.
B)   are a subdivision of Owner's Equity.
C)   record personal Expenses not related to the business.
D)   Both A and B are correct.E) A) and B)
F) A) and D)

Question 9

Mark paid $300 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) None of the above
F) A) and B)

Question 10

If beginning capital was $170,000, ending capital is $93,000, and the owner's withdrawals were $19,000, the amount of net income or net loss was:

Accepted Answer

A)   net income of $77,000.
B)   net income of $58,000.
C)   net loss of $58,000.
D)   net loss of $77,000.E) B) and C)
F) All of the above

Question 11

If Liabilities are $22,000 and Assets are $42,000, Owner's Equity will be $20,000.

Accepted Answer

A) True 
 B)False

Question 12

The cash purchase of a truck was recorded as a credit purchase. Due to this error:

Accepted Answer

A)   Assets were understated.
B)   Liabilities were understated.
C)   Answers A and B are both correct.
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 13

Which of the following transactions would cause one asset to decrease and another asset to increase?

Accepted Answer

A)   The business provided services to a cash customer.
B)   The business bought supplies for cash.
C)   The owner withdrew cash from the business.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 14

A purchase of a vehicle on credit would have what effect on the accounting equation?

Accepted Answer

A)   Total Assets and total Liabilities increase.
B)   Total Liabilities are overstated.
C)   Total Owner's Equity is overstated.
D)   Both A and B are correct.E) C) and D)
F) A) and B)

Question 15

Owner's withdrawals:

Accepted Answer

A)   decrease Assets.
B)   increase Expenses.
C)   increase Assets.
D)   decrease Withdrawals.E) None of the above
F) A) and D)

Question 16

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) B) and D)
F) B) and C)

Question 17

The claims of creditors against the Assets are:

Accepted Answer

A)   Expenses.
B)   Revenues.
C)   Liabilities.
D)   Owner's Equity.E) B) and C)
F) B) and D)

Question 18

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

Accepted Answer

A sole proprietorship is a business that...

Question 19

Which of the following is NOT a type of business organization?

Accepted Answer

A)   Corporation
B)   Partnership
C)   Sole proprietorship
D)   An Accounting organizationE) All of the above
F) B) and D)

Question 20

The Owner's Equity of Logan's Company is equal to one-half of the total Assets. Liabilities equal $90,000. What is the amount of Owner's Equity?

Accepted Answer

A)   $45,000
B)   $90,000
C)   $135,000
D)   None of these answers is correct.E) None of the above
F) C) and D)

Exam 1: Accounting Concepts and Procedures

Which of the following is NOT a type of business organization?

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If beginning capital was $170,000, ending capital is $93,000, and the owner's withdrawals were $19,000, the amount of net income or net loss was:

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Victoria received $1,000 from customers in partial payment for accounting services performed previously. The recording of this transaction would:

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

If Liabilities are $22,000 and Assets are $42,000, Owner's Equity will be $20,000.

Correct AnswerverifiedShow Answer

Which of the following would result if a business purchased Equipment with a 40% down payment and the rest on open account?

Correct AnswerverifiedShow Answer

The net income or net loss is calculated on the:

Correct AnswerverifiedShow Answer

The Owner's Equity of Logan's Company is equal to one-half of the total Assets. Liabilities equal $90,000. What is the amount of Owner's Equity?

Correct AnswerverifiedShow Answer

A purchase of a vehicle on credit would have what effect on the accounting equation?

Correct AnswerverifiedShow Answer

Revenue, Expenses, and withdrawals are subdivisions of:

Correct AnswerverifiedShow Answer

The cash purchase of a truck was recorded as a credit purchase. Due to this error:

Correct AnswerverifiedShow Answer

Mark paid $300 cash to partially reduce the amount owed for equipment that was previously bought on account. This transaction would:

Correct AnswerverifiedShow Answer

The claims of creditors against the Assets are:

Correct AnswerverifiedShow Answer

Expenses:

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Which of the following transactions would cause one asset to decrease and another asset to increase?

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Cup's Inc. paid $15,000 in salaries and wages for February. This transaction will:

Correct AnswerverifiedShow Answer

Owner's withdrawals:

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act was passed to:

Correct AnswerverifiedShow Answer

The purchase of supplies with both cash and on account was recorded as only an open account purchase. Due to this error:

Correct AnswerverifiedShow Answer

Which accounts are affected when the company pays salaries?

Correct AnswerverifiedShow Answer

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A sole proprietorship is a business that...
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