1. A decision whether to borrow money or sell stock is an example of (Points : 2) a financing decision an investing decision an operating decision a future decision

2. Which of these is NOT an expense? (Points : 2) cost of goods sold wages paid to employees for services consumed merchandise inventory purchased taxes paid to government

3. (Points : 2) $20,000 $0 >$20,000 $5,000 $15,000 $5,000 $15,000 $0 After months of planning, Alana opened a Natural Foods store on April 1 by investing $15,000 of her own money. She spent $10,000 on furnishings and fixtures that had been delivered and set up the night before. A friend had loaned Alana $5,000 which she used to purchase inventory prior to opening. When Alana opened for business on April 1, her accounting system should have contained what balances for total assets and total liabilities? Total Assets Total Liabilities

4. A transaction is (Points : 2) a record of increases and decreases in the dollar amount associated with a resource an event that causes increases or decreases in an account balance another term for the accounting process a check register for a bank account

5. Revenues are recorded when a business (Points : 2) creates resources by selling goods or services borrows money receives money from owners of the business pays its employees

6. Liabilities are amounts invested in an organization by its owners. (Points : 2) True False

7. Which of the following financial statements reports the resources available for use in the transformation process and claims to those resources at a point in time? (Points : 2) the income statement the cash-flow statement the balance sheet the retained earnings statement

8. During an accounting period, total assets increased by $500 while owners' equity increased by $800. The change in total liabilities during this period must have been a (Points : 2) $300 increase $300 decrease $1,300 increase $1,300 decrease

9. The operating activities of a business are critical to its ongoing success. (Points : 2) True False

10. The record that reflects changes in dollar amounts associated with a specific resource or activity is referred to as a(n) (Points : 2) transaction system balance account

11. What effect do revenues and expenses eventually have on Retained Earnings? Revenues Expenses (Points : 2) decrease decrease decrease increase increase increase increase decrease

12. Investing decisions involve choices about when and where to obtain financial resources and the amount needed. (Points : 2) True False

13. Which of the following is not an asset? (Points : 2) inventory contributed capital equipment furniture

14. On October 1, Hanover Trucking started business when Ed and Ralph each contributed $15,000 to the firm. That same day, a $20,000 truck was purchased with a cash down payment of 5,000 and a loan to be paid in the future for $15,000. No other transactions occurred in October. What were total assets equal to immediately after these transactions: (Points : 2) $50,000 $45,000 $30,000 $15,000

15. Revenues and expenses are reported on a(n) (Points : 2) asset statement cash flow statement balance sheet income statement

16. Which of the following is a financing activity? (Points : 2) inventory for resale is purchased on credit equipment to be used in the firm is purchased with cash employees are paid their weekly wages in cash a loan is obtained from the bank

17. Match the event below to the proper category of activity. Operating Activity Financing Activity (Points : 2) paying employee salaries paying off a bank loan obtaining a loan designing a new product buying factory equipment refunding a customer's money paying off a bank loan buying new tools

18. Accounting can be described as a link between business activities and business decisions. (Points : 2) True False

19. The sale of equipment is a financing activity. (Points : 2) True False

20. A balance among the elements of the accounting equation must maintained at all times. (Points : 2) True False