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- 1. Multiple Choice
A transaction is a normal business activity that changes assets, liabilities, or owner's equity.
True
False
- 2. Multiple Choice
Detailed information about changes in owner's equity is needed by owners and managers to make sound business decisions.
True
False
- 3. Multiple Choice
A transaction for the sale of goods or services results in an increase in owner's equity.
True
False
- 4. Multiple Choice
Revenue is a decrease in owner's equity resulting from the operation of a business.
True
False
- 5. Multiple Choice
When a company makes a sale of $300.00, assets and owner's equity increase by $300.00.
True
False
- 6. Multiple Choice
A revenue transaction decreases the sum of balances on the left side of an accounting equation.
True
False
- 7. Multiple Choice
Business expenses include payments for goods and services used to operate a business.
True
False
- 8. Multiple Choice
An expense is a decrease in owner's equity resulting from the operation of a business.
True
False
- 9. Multiple Choice
The accounting equation must remain in balance after the changes are caused by a transaction have been recorded.
True
False
- 10. Multiple Choice
Withdrawals are assets taken out of a business for the owner's personal use.
True
False
- 11. Multiple Choice
The most common type of withdrawal by an owner from a business is the withdrawal of cash.
True
False
- 12. Multiple Choice
When an owner withdraws cash from the business, the transaction affects both assets and owner's equity.
True
False
- 13. Multiple Choice
A decrease in owner's equity because of a withdrawal is a result of the normal operations of a business.
True
False
- 14. Multiple Choice
A withdrawal is an expense.
True
False
- 15. Multiple Choice
If a business received $2,000.00 from sales, this would:
increase assets and increase owner's equity
increase assets and decrease liabilities
increase liabilities and decrease owner's equity
decrease assets and decrease owner's equity
- 16. Multiple Choice
A transaction to pay for goods and services needed to operate a business results in a decrease in:
owner's equity
revenue
liabilities
expenses
- 17. Multiple Choice
If a business paid cash for repairs to equipment, this would:
increase owner's equity
increase liabilities
decrease owner's equity
decrease liabilities
- 18. Multiple Choice
If cash is paid for advertising,
two assets are changed
an asset and a liability are changed
an asset and owner's equity are changed
two liabilities are changed
- 19. Multiple Choice
When the owner withdraws cash for personal use,
liabilities increase and assets decrease
assets decrease and owner's equity increases
assets decrease and owner's equity decreases
liabilities decrease and assets decrease
- 20. Multiple Choice
Two transactions that decrease owner's equity are:
expenses and withdrawals
expenses and investments
withdrawals and investments
liabilities and expenses
- 21. Multiple Choice
A business paid cash for rent, $700.00; paid cash to the owner for personal use, $200.00; and paid cash for equipment, $50.00. Expenses from the operation of the business decrease owner's equity by:
$250.00
$750.00
$950.00
none of the above
- 22. Multiple Choice
A business prepares a balance sheet to report information about:
expenses incurred during a given period of time
revenue received during a given time
the business's assets, liabilities, and owner's equity
profit the business has made for the year
- 23. Multiple ChoiceTotal assets equal $500,000. Liabilities and Owner's Equity are equal to each other. How much are each?$500,000$1,000,000$250,000$1,500,000
- 24. Multiple ChoiceKim Park, Capital is classified as a(n)AssetLiabilityOwner's EquityExpense
- 25. Multiple ChoiceSales, Kim Park-Capital, Kim Park-Drawing (Which is NOT classified as Owner's Equity)SalesKim Park, CapitalKim Park, Drawing
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