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
- 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
- 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
- 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
- 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
- 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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