1 Users of accounting information may include (A) owners; (B) managers; (C) creditors; (D) government agencies; (E) all of these. Entering financial information about business events into the accounting 2 system is called (A) recording; (B) classifying: (C) interpreting; (D) analyzing; (E) reporting. 3 The amount by which the business assets exceed the business liabilities is (A) net income: (B) owner's equity; (C) revenue; (D) A&C; (E) B&C. If assets are $130.000 and liabilities are $25,000, owner's equity is (A) $155,000; (B) $130,000; (C) $105,000: (D) $25,000: (E) $0. 5 A business paid $1,000 for the month's rent. This transaction would (A) increase an asset and decrease an asset; (B) increase an asset and increase a liability; (C) decrease an asset and increase owner's equity: (D) decrease an asset and decrease owner's equity; (E) increase two asset accounts. A business paid $400 cash for services received earlier in the month. This transaction would (A) increase an asset and decrease an asset; (B) increase an asset and decrease a liability; (C) increase an asset and increase owner's equity; (D) decrease a liability and increase owner's equity: (E) none of these. Mr. T invested $20,000 in cash into his business. This transaction would (A) increase assets and decrease owner's equity; (B) decrease assets and increase owner's equity: (C) decrease assets and decrease liabilities; (D) increase assets and increase owner's cquity: (E) none of thesc. 8 Which of the following accounts is a liability? (A) Accounts Payable; (B) Sales: (C) Prepaid Insurance: (D) Retained Earnings; (E) Drawing. 9 Which of the following is reported on the balance sheet? (A) Accounts Payable: (B) Fees Earned; (C) Depreciation Expense, (D) Net Income. Which of the following is represented on the income statement? (A) Cash 10 received from sale of equipment; (B) Accounts Payable; (C) Ollice Equipment; (D) Net Loss 11 Which of the following will not appear on the statement of owner's equity? (A) Net Income; (B) Withdrawals; (C) Capital; (D) Fees Earned. Which financial statement illustrates the accounting equation? (A) Statement 12 of Owner's Equity: (B) Income Statement; (C) Balance Sheet; (D) Statement of Cash Flows. 13 The income statement provides information about (A) assets; (B) revenues; (C) owner's equity; (D) liabilities; (E) all of these. Which of the following would not decrease owner's equity? (A) sales; (B) 14 withdrawals of cash by the owner; (C) more expenses than revenues during the period; (D) expenses incurred: (E) none of these