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Multiple Choice Quiz




Question;1) Which of the following transactions would cause one asset to increase and another asset to decrease?;A. The owner invested cash in the businessb. the business paid a creditorc. the business incurred an expense on creditd. the business bought supplies for cash.;2) Bob purchased a new computer for the company on account. The transaction will.;a. increase computer, increase capitalb. decrease cash, increase accounts payablec. decrease cash, increase computerd. increase computer, increase accounts payable;3) Mary invested cash in her new business. What effect will this have?;a. increase an asset and increase a liabilityb. decrease as asset and increase a liabilityc. increase an asset and increase owner's equityd. increase as asset and decrease owner's equity;4) Bonnie's Baskets purchases $4,000 worth of office equipment on account. This causes;a. cash and capital to decreaseb. office equipment and accounts payable to increasec. office equipment to decrease and accounts payable to increased. accounts payable to increase and capital to decrease;5) Which of the following would result if a business purchased equipment paying a 40% down payment in cash?;a. equipment would increase and cash would decreaseb. accounts payable would increasec. since the equipment has not been paid in full, there is nothing to recordd. both and b are correct.;6) Katie's vegetarian restaurant, with total assets of $90,000, borrows $15,000 from the bank. Which of the following is a true statement upon borrowing the money?;a. total assets are now $105,000b. total assets are now $80,000c. total assets are now $15,000d. total assets are now $75,000;7) Which of the following will be recorded in the owner's equity column as an increase?;a. an exchange of assetsb. the purchase of an asset on creditc. an investment by the ownerd. a withdrawal by the owner;8) How does the purchase of office equipment on account affect the accounting equatiion?;a. assets increase, liabilities decreaseb. assets increase, owner's equity increasesc. assets increase, liabilities increased. liabilites increase, owner's equity decreases;9) If total liabilities are $1,000 and total assets are $8,000, owner's equity must be.;a. $7,000b. $3,000c.$10,000d. $13,000


Paper#43217 | Written in 18-Jul-2015

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