1. The Sarbanes-Oxley Act was passed to;A. prevent fraud at public companies.;B. replace all of the old accounting procedures with new ones.;C. improve the accuracy of the company?s financial reporting.;D. Both A and C;2. Which of the following would result if the business purchased supplies on credit?;A. Supplies would increase, and Cash would decrease.;B. Supplies would increase, and Capital would increase.;C. Supplies would increase, and Accounts Payable would increase.;D. The purchase of supplies isn?t a business transaction.;3. How does the purchase of office equipment on account affect the accounting equation?;A. Assets increase, and liabilities decrease.;B. Assets increase, and owner?s equity increases.;C. Assets increase, and liabilities increase.;D. Liabilities increase, and owner?s equity decreases.;4. Logan?s Motor Sports buys $30,000 of equipment on credit. Which of the following is a true statement?;A. Total assets increase.;B. Total assets are unchanged.;C. Total liabilities decrease.;D. Total liabilities are unchanged;5. Bob purchased a new computer for the company on account. The transaction will;A. increase Computer and increase Capital.;B. decrease Cash and increase Accounts Payable.;C. decrease Cash and increase Computer.;D. increase Computer and increase Accounts Payable.;6. If total liabilities are $1,000 and total assets are $8,000, owner?s equity must be;A. $7,000.;B. $3,000.;C. $10,000.;D. $13,000.;Explanation;Assets = Liabilities + owner equity;Owner equity = 8000-1000= 7000;7. Assets are equal to;A. liabilities + owner?s equity.;B. liabilities ? owner's equity.;C. liabilities ? revenues.;D. revenues ? expenses.;8. Strum Hardware has total assets of $50,000. What are the total assets if new equipment is purchased for $10,000 cash?;A. $45,000;B. $50,000;C. $55,000;D. $60,000;Explanation;9. 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 $105,000.;B. Total assets are now $80,000.;C. Total assets are now $15,000.;D. Total assets are now $75,000.;Explanation;10. Which transaction would cause one asset to increase and another asset to decrease?;A. The owner invested cash in the business.;B. The business paid a creditor.;C. The business incurred an expense on credit.;D. The business bought supplies for cash.;11. Which of the following is an advantage of a sole proprietorship form of business?;A. There?s limited personal risk.;B. The business can continue indefinitely.;C. The owner makes all the decisions.;D. All of the above;12. A legal firm would be considered a;A. merchandise company.;B. manufacturer.;C. service company.;D. None of the above;13. Which of the following is not a type of business organization?;A. Corporation;B. Partnership;C. Sole proprietorship;D. Operation;14. Mary invested cash in her new business. Which effect will this have?;A. Increase an asset, increase a liability;B. Decrease an asset, increase a liability;C. Increase an asset, increase owner?s equity;D. Increase an asset, decrease owner?s equity;15. Which of the following would result if a business purchased equipment with a 40% down payment in cash?;A. Equipment would increase, and Cash would decrease.;B. Accounts Payable would increase.;C. Since the equipment hasn?t been paid in full, there?s nothing to record.;D. Both A and B;16. The claims of creditors against the assets are;A. expenses.;B. revenues.;C. liabilities.;D. owner?s equity.;17. Bonnie?s Baskets purchases $4,000 worth of office equipment on account. This causes;A. Cash and Capital to decrease.;B. Office Equipment and Accounts Payable to increase.;C. Office Equipment to decrease and Accounts Payable to increase.;D. Accounts Payable to increase and Capital to decrease.;18. The purchase of supplies for cash would affect which account category?;A. Assets;B. Liabilities;C. Capital;D. Expense;19. If total liabilities are $18,000 and owner?s equity is $21,000, the total assets must be;A. $39,000.;B. $5,000.;C. $20,000.;D. $17,000.;Explanation;20. The balance sheet contains;A. liabilities, expenses, and capital.;B. assets, liabilities, and revenues.;C. expenses, assets, and cash.;D. assets, liabilities, and owner?s equity.
Paper#81430 | Written in 18-Jul-2015Price : $27