Test Bank For College Accounting A Career Approach, 12th Edition Chapter 1-14

Chapter 1—Asset, Liability, Owner's Equity, Revenue, and Expense Accounts MULTIPLE CHOICE 1. The purchase of an asset (like Equipment) on account will a. increase total liabilities and decrease total assets. b. have no effect on total assets or total liabilities. c. increase total assets and increase total liabilities. d. increase total assets and increase owner's equity. e. increase total assets and decrease owner's equity. ANS: C PTS: 1 DIF: Difficulty: Easy OBJ: LO: 1-1 NAT: AACSB: Reflective Thinking STA: AICPA-FN: Measurement|ACBSP: Recording Transactions KEY: Bloom's: Comprehension 2. Amounts owed by a business are referred to as a. assets. b. equities. c. liabilities. d. capital. e. expenses. ANS: C PTS: 1 DIF: Difficulty: Easy OBJ: LO: 1-1 NAT: AACSB: Reflective Thinking STA: AICPA-FN: Measurement|ACBSP: GAAP KEY: Bloom's: Knowledge 3. Which of the following equations is the fundamental accounting equation? a. Assets  Liabilities = Owner's Equity b. Assets = Liabilities + Owner's Equity c. Assets + Liabilities = Owner's Equity d. Assets  Owner's Equity = Liabilities e. Assets + Owner's Equity = Liabilities ANS: B PTS: 1 DIF: Difficulty: Easy OBJ: LO: 1-1 NAT: AACSB: Reflective Thinking STA: AICPA-FN: Measurement|ACBSP: GAAP KEY: Bloom's: Application 4. When an owner deposits cash in an account in the name of the business, it is an increase to a. Cash and Accounts Receivable. b. Cash and Drawing. c. Cash and Capital. d. Cash and Accounts Payable. e. Cash and Rent Expense. ANS: C PTS: 1 DIF: Difficulty: Easy OBJ: LO: 1-2 NAT: AACSB: Analytic STA: AICPA-FN: Measurement|ACBSP: Recording Transactions KEY: Bloom's: Comprehension 5. Which of the following is not considered an account? a. Equipment b. Revenues c. Accounts Payable © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.