Question 1

Match the terms below with the correct definitions.
-Categories under the main headings Assets, Liabilities, Owner's Equity

Accepted Answer

A)  Creditor
B)  Fundamental accounting equation
C)  Expenses
D)  Accounts
E)  Owner's equityF) Accounts receivableG) AssetH) CashI) Business entity

Question 2

Match the terms below with the correct definitions.
-Represents amount owed by charge customers

Accepted Answer

A)  Creditor
B)  Fundamental accounting equation
C)  Expenses
D)  Accounts
E)  Owner's equityF) Accounts receivableG) AssetH) CashI) Business entity

Question 3

The purchase of office equipment on account would involve a(n)

Accepted Answer

A)   increasing an asset and increasing a liability.
B)   decreasing an asset and increasing an asset.
C)   decreasing an asset and increasing an expense.
D)   increasing an asset and increasing an expense.

Question 4

When a company receives cash on account from a credit customer, the company should record a(n)

Accepted Answer

A)   increase to Accounts Receivable.
B)   decrease to Cash.
C)   increase to Revenue.
D)   decrease to Accounts Receivable.

Question 5

Harry Dental Clinic has the following accounts and balances:
 Cash, $2,000
Accounts Receivable, $1,250
Professional Equipment, $10,200
Office Equipment, $5,500
Accounts Payable, $3,500
P. Palmer, Capital, $10,000
P. Palmer, Drawing, $1,000
Professional fee earned, $18,000
Rent Expense, $12,350
Wage Expense, $1,200
What is the amount of assets in the accounting equation?

Accepted Answer

A)   $10,250
B)   $12,350
C)   $18,950
D)   $16,530

Question 6

Every transaction is recorded in terms of increases and/or decreases in two or more accounts.

Accepted Answer

A) True 
 B)False

Question 7

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

Accepted Answer

A)   Assets increase; liabilities, no effect; owner's equity increases.
B)   Assets decrease; liabilities, no effect; owner's equity increases.
C)   Assets increase; liabilities, no effect; owner's equity decreases.
D)   Assets increase; liabilities, increase; owner's equity, no effect.

Question 8

Otto Company paid a credit on account, $1,500. Which of the following is true in regards to the fundamental accounting equation?

Accepted Answer

A)   Assets increased by $1,500.
B)   Liabilities increased by $1,500.
C)   Liabilities decreased by $1,500.
D)   Owner's equity increased by $1,500.
E)   Owner's equity decreased by $1,500.

Question 9

An example of a liability is

Accepted Answer

A)   Cash.
B)   Prepaid Insurance.
C)   Rent Expense.
D)   Accounts Payable.

Question 10

Liabilities represent amounts owed to creditors.

Accepted Answer

A) True 
 B)False

Question 11

Petkus Company paid Perkins Products, a creditor, on account, $7,500. What are the effects on the fundamental account equation?

Accepted Answer

A)   Assets increase $7,500; liabilities, no effect; owner's equity increases $7,500.
B)   Assets decrease $7,500; liabilities, no effect; owner's equity decreases $7,500.
C)   Assets increase $7,500; liabilities decrease $7,500; owner's equity, no effect.
D)   Assets decrease $7,500; liabilities decrease $7,500; owner's equity, no effect.
E)   Assets decrease $7,500; liabilities increase $7,500; owner's equity, no effect.

Question 12

Match the terms below with the correct definitions.
-Costs that relate to the earning of revenue

Accepted Answer

A)  Creditor
B)  Fundamental accounting equation
C)  Expenses
D)  Accounts
E)  Owner's equityF) Accounts receivableG) AssetH) CashI) Business entity

Question 13

Match between columns
                        Premises:  Costs that relate to the earning of revenue
 Assets minus liabilities
 Represents amount owed by charge customers
 One to whom money is owed
 A business enterprise, separate and distinct from the person who supplies its assets (economic unit in itself)
Something a company owns of value
 Categories under the main headings Assets, Liabilities, Owner's Equity
 Company's asset account from which bills are paid
 Expresses the relationship between assets, liabilities, and owner's equity

Accepted Answer

The Answer of Creditor and Fundamental accounting equation and Expenses is...

Question 14

The _____________ means that a business is separated from its owners.

Accepted Answer

A)   stand-alone entity concept
B)   equity concept
C)   separate entity concept
D)   fair value concept
E)   none of the answers listed

Question 15

Jamie's Lighting Company paid rent for the month, $2,500. What are the effects on the fundamental accounting equation?

Accepted Answer

A)   Assets increase $2,500; liabilities, no effect; owner's equity increases $2,500.
B)   Assets decrease $2,500; liabilities, no effect; owner's equity increases $2,500.
C)   Assets decrease $2,500; liabilities, decrease $2,500; owner's equity, no effect.
D)   Assets decrease $2,500; liabilities, no effect; owner's equity decreases $2,500.

Question 16

Accounts Receivable is considered an asset.

Accepted Answer

A) True 
 B)False

Question 17

When the rent for the business is paid with a check,

Accepted Answer

A)   Cash is decreased and Rent Expense is decreased.
B)   Cash is decreased and Rent Income is increased.
C)   Cash is decreased and Rent Expense is increased.
D)   Cash is decreased and Accounts Payable is decreased.
E)   Cash is increased and Rent Expense is decreased.

Question 18

The amounts that the business entity owes its creditors are referred to as

Accepted Answer

A)   assets.
B)   liabilities.
C)   owner's equity.
D)   revenues.
E)   expenses.

Question 19

Double-entry accounting means that, for each transaction, an amount must be added to or subtracted from each side of the equation.

Accepted Answer

A) True 
 B)False

Question 20

When an owner withdraws cash from the business, it results in a decrease in:

Accepted Answer

A)   Cash and Accounts Receivable.
B)   Cash and Contingent Liabilities.
C)   Cash and Capital.
D)   Cash and Accounts Payable.
E)   Cash and Long-term Liabilities.

Exam 1: Asset, Liability, Owners Equity, Revenue, and Expense Accounts

Every transaction is recorded in terms of increases and/or decreases in two or more accounts.

Correct Answer
verified

The amounts that the business entity owes its creditors are referred to as

Correct Answer
verified

Otto Company paid a credit on account, $1,500. Which of the following is true in regards to the fundamental accounting equation?

Correct Answer
verified

The _____________ means that a business is separated from its owners.

Correct Answer
verified

Petkus Company paid Perkins Products, a creditor, on account, $7,500. What are the effects on the fundamental account equation?

Correct Answer
verified

An example of a liability is

Correct Answer
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When the rent for the business is paid with a check,

Correct Answer
verified

Match the terms below with the correct definitions. -Represents amount owed by charge customers

Correct Answer
verified

Match the terms below with the correct definitions. -Categories under the main headings Assets, Liabilities, Owner's Equity

Correct Answer
verified

Liabilities represent amounts owed to creditors.

Correct Answer
verified

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

Correct Answer
verified

When a company receives cash on account from a credit customer, the company should record a(n)

Correct Answer
verified

Match the correct definitions below with the terms.

Match the terms below with the correct definitions. -Costs that relate to the earning of revenue

Correct Answer
verified

Jamie's Lighting Company paid rent for the month, $2,500. What are the effects on the fundamental accounting equation?

Correct Answer
verified

The purchase of office equipment on account would involve a(n)

Correct Answer
verified

Double-entry accounting means that, for each transaction, an amount must be added to or subtracted from each side of the equation.

Correct Answer
verified

Correct Answer
verified

Accounts Receivable is considered an asset.

Correct Answer
verified

When an owner withdraws cash from the business, it results in a decrease in:

Correct Answer
verified

Exam 1: Asset, Liability, Owners Equity, Revenue, and Expense Accounts

Every transaction is recorded in terms of increases and/or decreases in two or more accounts.

Correct AnswerverifiedShow Answer

The amounts that the business entity owes its creditors are referred to as

Correct AnswerverifiedShow Answer

Otto Company paid a credit on account, $1,500. Which of the following is true in regards to the fundamental accounting equation?

Correct AnswerverifiedShow Answer

The _____________ means that a business is separated from its owners.

Correct AnswerverifiedShow Answer

Petkus Company paid Perkins Products, a creditor, on account, $7,500. What are the effects on the fundamental account equation?

Correct AnswerverifiedShow Answer

An example of a liability is

Correct AnswerverifiedShow Answer

When the rent for the business is paid with a check,

Correct AnswerverifiedShow Answer

Match the terms below with the correct definitions. -Represents amount owed by charge customers

Correct AnswerverifiedShow Answer

Match the terms below with the correct definitions. -Categories under the main headings Assets, Liabilities, Owner's Equity

Correct AnswerverifiedShow Answer

Liabilities represent amounts owed to creditors.

Correct AnswerverifiedShow Answer

Ott Company sold services for cash. What are the effects on the fundamental accounting equation?

Correct AnswerverifiedShow Answer

When a company receives cash on account from a credit customer, the company should record a(n)

Correct AnswerverifiedShow Answer

Match the correct definitions below with the terms.

Match the terms below with the correct definitions. -Costs that relate to the earning of revenue

Correct AnswerverifiedShow Answer

Jamie's Lighting Company paid rent for the month, $2,500. What are the effects on the fundamental accounting equation?

Correct AnswerverifiedShow Answer

The purchase of office equipment on account would involve a(n)

Correct AnswerverifiedShow Answer

Double-entry accounting means that, for each transaction, an amount must be added to or subtracted from each side of the equation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Accounts Receivable is considered an asset.

Correct AnswerverifiedShow Answer

When an owner withdraws cash from the business, it results in a decrease in:

Correct AnswerverifiedShow Answer

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