
A01V Exam 1 Answers Attempt 1 - Ashworth
A01V Introduction to Accounting Exam 1 Answers Attempt 1 (Ashworth)
Lesson 1 |
Question 1 |
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5 / 5 points |
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?
Question options:
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Total assets are now $105,000. |
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Total assets are now $80,000. |
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Total assets are now $15,000. |
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Total assets are now $75,000. |
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Question 2 |
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5 / 5 points |
Logan's Motor Sports buys $30,000 of equipment on credit. Which of the following is a true statement?
Question options:
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Total assets increase. |
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Total assets are unchanged. |
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Total liabilities decrease. |
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Total liabilities are unchanged. |
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Question 3 |
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5 / 5 points |
The balance sheet contains __________.
Question options:
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liabilities, expenses and capital |
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assets, liabilities and revenues |
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expenses, assets and cash |
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assets, liabilities and owner's equity |
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Question 4 |
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5 / 5 points |
Bonnie's Baskets purchases $4,000 worth of office equipment on account. This causes
Question options:
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Cash and Capital to decrease. |
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Office Equipment and Accounts Payable to increase. |
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Office Equipment to decrease and Accounts Payable to increase. |
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Accounts Payable to increase and Capital to decrease. |
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Question 5 |
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5 / 5 points |
Mary invested cash in her new business. What effect will this have?
Question options:
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increase an asset and increase a liability |
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decrease an asset and increase a liability |
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increase an asset and increase owner's equity |
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increase an asset and decrease owner's equity |
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Question 6 |
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5 / 5 points |
Which of the following would result if a business purchased Equipment paying a 40% down payment in cash?
Question options:
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Equipment would increase and Cash would decrease. |
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Accounts Payable would increase. |
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Since the equipment has not been paid in full, there is nothing to record. |
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Both A and B are correct. |
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Question 7 |
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5 / 5 points |
If total assets are $30,000 and total liabilities are $18,000, Capital must equal __________.
Question options:
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$12,000 |
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$28,000 |
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$8,000 |
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$20,000 |
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Question 8 |
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5 / 5 points |
If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in the owner's equity amount?
Question options:
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increase of $2,000 |
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decrease of $2,000 |
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increase of $10,000 |
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decrease of $10,000 |
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Question 9 |
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5 / 5 points |
A partnership is a business that is __________.
Question options:
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easy to form |
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ends with the death of a partner |
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owned by more than one person |
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All of these answers are correct. |
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Question 10 |
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0 / 5 points |
Which is an advantage of a sole proprietorship form of business?
Question options:
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There is limited personal risk. |
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The business can continue indefinitely. |
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The owner makes all the decisions. |
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Question 11 |
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5 / 5 points |
A legal firm would be considered a __________.
Question options:
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merchandise company |
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manufacturer |
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service company |
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None of the above answers are correct. |
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Question 12 |
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5 / 5 points |
A purchase of a vehicle for cash would have what effect on the accounting equation?
Question options:
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Total asset amount remains the same. |
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Total liabilities are overstated. |
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Total owner's equity is overstated. |
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Both A and B are correct. |
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Question 13 |
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5 / 5 points |
If total liabilities are $18,000 and owner's equity is $21,000, the total assets must be __________.
Question options:
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$39,000 |
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$5,000 |
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$20,000 |
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$17,000 |
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Question 14 |
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5 / 5 points |
The purpose of the accounting process is to provide financial information about __________.
Question options:
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sole proprietorships |
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small businesses |
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large corporations |
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All of these answers are correct. |
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Question 15 |
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5 / 5 points |
Which of the following will be recorded in the owner's equity column as an increase?
Question options:
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an exchange of assets |
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the purchase of an asset on credit |
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an investment by the owner |
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a withdrawal by the owner |
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Question 16 |
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5 / 5 points |
If total liabilities are $1,000 and total assets are $8,000, owner's equity must be __________.
Question options:
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$7,000 |
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$3,000 |
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$10,000 |
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$13,000 |
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Question 17 |
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5 / 5 points |
The Sarbanes-Oxley Act was passed to __________.
Question options:
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prevent fraud at public companies |
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replace all of the old accounting procedures with new ones |
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improve the accuracy of the company's financial reporting |
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Both A and C are correct. |
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Question 18 |
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5 / 5 points |
Strum Hardware has total assets of $50,000. What are the total assets if new equipment is purchased for $10,000 cash?
Question options:
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$45,000 |
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$50,000 |
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$55,000 |
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$60,000 |
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Question 19 |
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5 / 5 points |
Which of the following transactions would cause one asset to increase and another asset to decrease?
Question options:
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The owner invested cash in the business. |
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The business paid a creditor. |
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The business incurred an expense on credit. |
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The business bought supplies for cash. |
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Question 20 |
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5 / 5 points |
Which of the following is a characteristic of a sole proprietorship?
Question options:
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business owned by more than one person |
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easy to form |
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each stockholder acts as an owner of the company |
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can continue indefinitely |