A02 All Exams Answers (Ashworth College)

A02 All Exams Answers (Ashworth College)

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A02 Principles of Accounting I All Exams Answers (Ashworth College)

EXAM 1

Part 1 of 1 -

100.0/ 100.0 Points

 

Question 1 of 20

5.0/ 5.0 Points

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 is not a business transaction.

 

 

Question 2 of 20

5.0/ 5.0 Points

The purchase of supplies for cash would affect which account category?  

 

 

 

A. assets

 

 

B. liabilities

 

 

C. capital

 

 

D. expense

 

 

Question 3 of 20

5.0/ 5.0 Points

Mary invested cash in her new business. What effect will this have?

 

 

 

A. increase an asset and increase a liability

 

 

B. decrease an asset and increase a liability

 

 

C. increase an asset and increase owner's equity

 

 

D. increase an asset and decrease owner's equity

 

 

Question 4 of 20

5.0/ 5.0 Points

A legal firm would be considered a __________.

 

 

 

A. merchandise company

 

 

B. manufacturer

 

 

C. service company

 

 

D. None of the above answers are correct.

 

 

Question 5 of 20

5.0/ 5.0 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?

 

 

 

A. increase of $2,000

 

 

B. decrease of $2,000

 

 

C. increase of $10,000

 

 

D. decrease of $10,000

 

 

Question 6 of 20

5.0/ 5.0 Points

A corporation __________.

 

 

 

A. can continue indefinitely

 

 

B. is owned by stockholders

 

 

C. has limited risk to stockholders

 

 

D. All of these answers are correct.

 

 

Question 7 of 20

5.0/ 5.0 Points

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.

 

 

Question 8 of 20

5.0/ 5.0 Points

Which of the following transactions 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.

 

 

Question 9 of 20

5.0/ 5.0 Points

How does the purchase of office equipment on account affect the accounting equation?  

 

 

 

A. assets increase; liabilities decrease

 

 

B. assets increase; owner's equity increases

 

 

C. assets increase; liabilities increase

 

 

D. liabilities increase; owner's equity decreases

 

 

Question 10 of 20

5.0/ 5.0 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?


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