1) Accounting is the information system that indicates, records and communicates the economic events of an organization to interested users. TRUE FALSE 2) Bookkeeping deals with the record keeping process and is only one aspect of accounting TRUE FALSE External users are those who manage the business. TRUE 3) 4) FALSE The Financial Accounting standard Board is the primary accounting standard body in the United States. TRUE FALSE 5) Net Income is the excess of expenses over revenues for the accounting period. TRUE FALSE 6) The economic entity assumption requires that the activities of the equity be kept separate and distinct from the activities of its owner and all other economic entities. TRUE FALSE 7) Collection of an accounts receivable will increase both cash and accounts receivable. TRUE FALSE An expense paid with cash would result in an equal decrease in liabilities and owner's equity TRUE FALSE Liabilities represent the ownership claim on total assets. TRUE F 8) 9) Multiple Choice Performing services on account will have the following effects on the components of the basic accounting equation. 1) a. b. c. d. Increase assets and decrease owner's equity Increase assets and increase owners equity Increase assets and increase liabilities Increase liabilities and increase owners equity As of December Stoneland Company has assets of $3,500 and owner's equity of $2,000. What are the liabilities for Stoneland Company as of December 31, 2017 2) a. $1,500 b. $1,000 c. $2, 500 d.$2,000 3) Which of the following event is not recorded in the accounting records? a. Equipment is purchased on account? b. An employee is terminated. A cash investment is made into the business. The owner withdraws cash for personal use. c. d. During 2018, Gibson Company's asset decreased $50,000 and its liabilities decreased $90,000. Its owner equity therefore, 4) a. Increased $40,000 b. Decreased $140,000 c. Decreased $40,000 d. Increased $140,000 5) All of the following are external users of accounting information except a. Labor unions b. Taxing authorities c. Regulatory agencies