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Accounting with tables and multiple choice questions.pdf
Accounting_with_tables_and_multiple_choice_questions.pdf
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CHAPTER 1 ACCOUNTING IN ACTION SUMMARY OF QUESTI
CHAPTER 1 ACCOUNTING IN ACTION SUMMARY OF QUESTI
CHAPTER 1 ACCOUNTING IN ACTION SU...
CHAPTER 1 ACCOUNTING IN ACTION SUMMARY OF QUESTI
Accounting in Action
1 - 17
118.
If an owner makes a withdrawal of cash from a proprietorship, then
a.
there has been a violation of accounting principles.
b. owner's equity will increase.
c.
owner's equity will decrease.
d.
there will be a new liability showing the owner owes money to the business.
119.
If supplies that have been purchased are used in the course of business, then
a. a liability will increase.
b. an asset will increase.
c.
owner's equity will decrease.
d. owner's equity will increase.
120.
As of December 31, 2008, Anders Company has assets of $35,000 and owner's equity of
$20,000. What are the liabilities for Anders Company as of December 31, 2008?
a. $15,000
b. $10,000
c. $25,000
d. $20,000
121.
Which of the following events is
not
a business transaction?
a.
Investment of cash by the owner
b. Hired employees
c.
Incurred utility expenses for the month
d.
Earned revenue for services provided
122.
Net income results when
a. Assets > Liabilities.
b. Revenues = Expenses.
c. Revenues > Expenses.
d. Revenues < Expenses.
123.
Owner's capital at the end of the period is equal to
a.
owner's capital at the beginning of the period plus net income minus liabilities.
b.
owner's capital at the beginning of the period plus net income minus drawings.
c. net income.
d. assets plus liabilities.
124.
A balance sheet shows
a.
revenues, liabilities, and owner's equity.
b.
expenses, drawings, and owner's equity.
c.
revenues, expenses, and drawings.
d.
assets, liabilities, and owner's equity.
125.
An income statement
a.
summarizes the changes in owner's equity for a specific period of time.
b.
reports the changes in assets, liabilities, and owner's equity over a period of time.
c.
reports the assets, liabilities, and owner's equity at a specific date.
d.
presents the revenues and expenses for a specific period of time.
Test Bank for Accounting Principles, Eighth Edition
1 - 18
126.
If the owner's equity account increases from the beginning of the year to the end of the
year, then
a.
net income is less than owner drawings.
b.
a net loss is less than owner drawings.
c.
additional owner investments are less than net losses.
d.
net income is greater than owner drawings.
Use the following information for questions 127–129.
Jimmy's Car Repair Shop started the year with total assets of $270,000 and total liabilities of
$180,000. During the year, the business recorded $450,000 in car repair revenues, $255,000 in
expenses, and Jimmy withdrew $45,000.
127.
Jimmy's Capital balance at the end of the year was
a. $240,000.
b. $225,000.
c. $285,000.
d. $195,000.
128.
The net income reported by Jimmy's Car Repair Shop for the year was
a. $150,000.
b. $195,000.
c. $90,000.
d. $405,000.
129.
Jimmy's Capital balance changed by what amount from the beginning of the year to the
end of the year?
a. $45,000
b. $195,000
c. $90,000
d. $150,000
130.
The balance sheet is frequently referred to as
a. an operating statement.
b.
the statement of financial position.
c.
the statement of cash flows.
d.
the statement of owner's equity.
131.
The primary purpose of the statement of cash flows is to report
a. a company's investing transactions.
b. a company's financing transactions.
c.
information about cash receipts and cash payments of a company.
d.
the net increase or decrease in cash.
132.
All of the financial statements are for a period of time
except
the
a. income statement.
b. owner's equity statement.
c. balance sheet.
d. statement of cash flows.
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