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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 - 15
104.
If total liabilities decreased by $15,000 and owner’s equity increased by $5,000 during a
period of time, then total assets must change by what amount and direction during that
same period?
a. $20,000 increase
b. $10,000 decrease
c. $10,000 increase
d. $15,000 decrease
105.
If total liabilities decreased by $25,000 and owner’s equity increased by $5,000 during a
period of time, then total assets must change by what amount and direction during that
same period?
a. $20,000 decrease
b. $20,000 increase
c. $25,000 increase
d. $30,000 increase
106.
If total liabilities decreased by $15,000 and owner’s equity decreased by $5,000 during a
period of time, then total assets must change by what amount and direction during that
same period?
a. $20,000 increase
b. $10,000 increase
c. $20,000 decrease
d. $10,000 decrease
107.
If total liabilities increased by $14,000 during a period of time and owner’s equity
decreased by $6,000 during the same period, then the amount and direction (increase or
decrease) of the period’s change in total assets is a(n)
a. $14,000 increase.
b. $20,000 increase.
c. $8,000 decrease.
d. $8,000 increase.
108.
The accounting equation for Goodboys Enterprises is as follows:
Assets
Liabilities
Owner’s Equity
$120,000 = $60,000
+
$60,000
If Goodboys purchases office equipment on account for $12,000, the accounting equation
will change to
Assets
Liabilties
Owner’s Equity
a. $120,000
=
$60,000
+ $60,000
b. $132,000
=
$60,000
+ $72,000
c. $132,000
=
$66,000
+ $66,000
d. $132,000
=
$72,000
+ $60,000
109.
As of June 30, 2008, Houston Company has assets of $100,000 and owner’s equity of
$5,000. What are the liabilities for Houston Company as of June 30, 2008?
a. $85,000
b. $90,000
c. $95,000
d. $100,000
Test Bank for Accounting Principles, Eighth Edition
1 - 16
110.
Owner's equity is increased by
a. drawings.
b. revenues.
c. expenses.
d. liabilities.
111.
Owner's equity is decreased by
a. assets.
b. revenues.
c. expenses.
d. liabilities.
112.
If total liabilities increased by $4,000, then
a.
assets must have decreased by $4,000.
b.
owner's equity must have increased by $4,000.
c. assets must have increased by $4,000, or owner's equity must have decreased by
$4,000.
d.
assets and owner's equity each increased by $2,000.
113.
Collection of a $500 Accounts Receivable
a.
increases an asset $500; decreases an asset $500.
b.
increases an asset $500; decreases a liability $500.
c.
decreases a liability $500; increases owner's equity $500.
d.
decreases an asset $500; decreases a liability $500.
114.
Revenues are
a.
the cost of assets consumed during the period.
b.
gross increases in owner's equity resulting from business activities.
c.
the cost of services used during the period.
d.
actual or expected cash outflows.
115.
If an individual asset is increased, then
a.
there must be an equal decrease in a specific liability.
b.
there must be an equal decrease in owner's equity.
c.
there must be an equal decrease in another asset.
d.
none of these is possible.
116.
If services are rendered for credit, then
a. assets will decrease.
b. liabilities will increase.
c.
owner's equity will increase.
d. liabilities will decrease.
117.
If expenses are paid in cash, then
a. assets will increase.
b. liabilities will decrease.
c.
owner's equity will increase.
d. assets will decrease.
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