Question 1

Liabilities represent an "inside" interest in a business.

Accepted Answer

A) True 
 B)False

Question 2

The accounting equation may be expressed as assets − liabilities = owner's equity.

Accepted Answer

A) True 
 B)False

Question 3

Any item a business owns that will provide future benefits is called owner's equity.

Accepted Answer

A) True 
 B)False

Question 4

The financial statement that should be completed first is the

Accepted Answer

A)   balance sheet.
B)   statement of financial position.
C)   statement of financial condition.
D)   income statement.

Question 5

Match the terms with the definitions.
-The decrease in assets (or increase in liabilities)  as a result of efforts to produce revenues.

Accepted Answer

A)  account
B)  accounts payable
C)  accounts receivable
D)  accounting equation
E)  assetsF) balance sheetG) business entityH) business entity conceptI) business transactionJ) drawingK) expensesL) income statementM) liabilityN) net incomeO) net lossP) notes payableQ) owner's equityR) revenuesS) statement of owner's equity

Question 6

Match the terms with the definitions.
-An individual, association, or organization that engages in economic activities and controls specific economic resources.

Accepted Answer

A)  account
B)  accounts payable
C)  accounts receivable
D)  accounting equation
E)  assetsF) balance sheetG) business entityH) business entity conceptI) business transactionJ) drawingK) expensesL) income statementM) liabilityN) net incomeO) net lossP) notes payableQ) owner's equityR) revenuesS) statement of owner's equity

Question 7

Sue Lee paid $1,200 for her employees' salaries. This transaction would

Accepted Answer

A)   increase assets and decrease owner's equity.
B)   increase assets and increase liabilities.
C)   decrease assets and decrease liabilities.
D)   decrease assets and decrease owner's equity.

Question 8

An increase in a revenue account may also result in an increase in the accounts receivable account.

Accepted Answer

A) True 
 B)False

Question 9

Increases to owner's equity may be from

Accepted Answer

A)   expenses that are incurred.
B)   expenses exceeding revenue for the period.
C)   withdrawals of cash from the business by the owner.
D)   revenue that is derived from sales of goods or services.

Question 10

A business entity is an individual, association, or organization with control over economic resources and which engages in economic activities.

Accepted Answer

A) True 
 B)False

Question 11

Match the terms with the definitions.
-A formal written promise to pay a supplier or lender a specified sum of money at a definite future time.

Accepted Answer

A)  account
B)  accounts payable
C)  accounts receivable
D)  accounting equation
E)  assetsF) balance sheetG) business entityH) business entity conceptI) business transactionJ) drawingK) expensesL) income statementM) liabilityN) net incomeO) net lossP) notes payableQ) owner's equityR) revenuesS) statement of owner's equity

Question 12

Meghan started her business by investing $30,000 in cash. This transaction would

Accepted Answer

A)   increase assets and increase owner's equity.
B)   increase assets and increase liabilities.
C)   increase one asset and decrease another asset.
D)   decrease assets and decrease liabilities.

Question 13

Match the terms with the definitions.
-Items a business owns that will provide future benefits.

Accepted Answer

A)  account
B)  accounts payable
C)  accounts receivable
D)  accounting equation
E)  assetsF) balance sheetG) business entityH) business entity conceptI) business transactionJ) drawingK) expensesL) income statementM) liabilityN) net incomeO) net lossP) notes payableQ) owner's equityR) revenuesS) statement of owner's equity

Question 14

The financial statement that shows the state of the firm's assets, liabilities, and owner's equity on a specific date is called a(n)

Accepted Answer

A)   balance sheet.
B)   statement of operations.
C)   statement of owner's equity.
D)   income statement.

Question 15

Match the terms with the definitions.
-Reports beginning capital, plus net income, less withdrawals to compute ending capital.

Accepted Answer

A)  account
B)  accounts payable
C)  accounts receivable
D)  accounting equation
E)  assetsF) balance sheetG) business entityH) business entity conceptI) business transactionJ) drawingK) expensesL) income statementM) liabilityN) net incomeO) net lossP) notes payableQ) owner's equityR) revenuesS) statement of owner's equity

Question 16

The income statement and statement of owner's equity provide information covering a period of time.

Accepted Answer

A) True 
 B)False

Question 17

Expenses that are incurred in operating the enterprise increase owner's equity.

Accepted Answer

A) True 
 B)False

Exam 2: Analyzing Transactions: the Accounting Equation

The income statement and statement of owner's equity provide information covering a period of time.

Correct Answer
verified

The financial statement that shows the state of the firm's assets, liabilities, and owner's equity on a specific date is called a(n)

Correct Answer
verified

A business entity is an individual, association, or organization with control over economic resources and which engages in economic activities.

Correct Answer
verified

Match the terms with the definitions. -Items a business owns that will provide future benefits.

Correct Answer
verified

Any item a business owns that will provide future benefits is called owner's equity.

Correct Answer
verified

Liabilities represent an "inside" interest in a business.

Correct Answer
verified

Increases to owner's equity may be from

Correct Answer
verified

Match the terms with the definitions. -A formal written promise to pay a supplier or lender a specified sum of money at a definite future time.

Correct Answer
verified

An increase in a revenue account may also result in an increase in the accounts receivable account.

Correct Answer
verified

Match the terms with the definitions. -The decrease in assets (or increase in liabilities) as a result of efforts to produce revenues.

Correct Answer
verified

Match the terms with the definitions. -Reports beginning capital, plus net income, less withdrawals to compute ending capital.

Correct Answer
verified

Sue Lee paid $1,200 for her employees' salaries. This transaction would

Correct Answer
verified

The accounting equation may be expressed as assets − liabilities = owner's equity.

Correct Answer
verified

The financial statement that should be completed first is the

Correct Answer
verified

Meghan started her business by investing $30,000 in cash. This transaction would

Correct Answer
verified

Match the terms with the definitions. -An individual, association, or organization that engages in economic activities and controls specific economic resources.

Correct Answer
verified

Expenses that are incurred in operating the enterprise increase owner's equity.

Correct Answer
verified

Exam 2: Analyzing Transactions: the Accounting Equation

The income statement and statement of owner's equity provide information covering a period of time.

Correct AnswerverifiedShow Answer

The financial statement that shows the state of the firm's assets, liabilities, and owner's equity on a specific date is called a(n)

Correct AnswerverifiedShow Answer

A business entity is an individual, association, or organization with control over economic resources and which engages in economic activities.

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -Items a business owns that will provide future benefits.

Correct AnswerverifiedShow Answer

Any item a business owns that will provide future benefits is called owner's equity.

Correct AnswerverifiedShow Answer

Liabilities represent an "inside" interest in a business.

Correct AnswerverifiedShow Answer

Increases to owner's equity may be from

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -A formal written promise to pay a supplier or lender a specified sum of money at a definite future time.

Correct AnswerverifiedShow Answer

An increase in a revenue account may also result in an increase in the accounts receivable account.

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -The decrease in assets (or increase in liabilities) as a result of efforts to produce revenues.

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -Reports beginning capital, plus net income, less withdrawals to compute ending capital.

Correct AnswerverifiedShow Answer

Sue Lee paid $1,200 for her employees' salaries. This transaction would

Correct AnswerverifiedShow Answer

The accounting equation may be expressed as assets − liabilities = owner's equity.

Correct AnswerverifiedShow Answer

The financial statement that should be completed first is the

Correct AnswerverifiedShow Answer

Meghan started her business by investing $30,000 in cash. This transaction would

Correct AnswerverifiedShow Answer

Match the terms with the definitions. -An individual, association, or organization that engages in economic activities and controls specific economic resources.

Correct AnswerverifiedShow Answer

Expenses that are incurred in operating the enterprise increase owner's equity.

Correct AnswerverifiedShow Answer

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