# Test Bank For College Accounting A Career Approach 12th Edition Cathy J Scott

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Edition: 12th Edition

Resource Type: Test bank

## Test Bank For College Accounting A Career Approach 12th Edition Cathy J Scott

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

1. 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

1. 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

1. 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

1. Which of the following is not considered an account?
 a. Equipment b. Revenues c. Accounts Payable d. Cash e. Accounts Receivable

ANS:  B                    PTS:   1                    DIF:    Difficulty: Easy

OBJ:   LO: 1-2          NAT:  AACSB: Reflective Thinking

STA:   AICPA-FN: Measurement|ACBSP: GAAP                                 KEY:   Bloom’s: Knowledge

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