1. Which of the following equations properly represents a derivation of the fundamental accounting equation?

A. Assets = Capital + Owner's Equity

B. Assets - Owner's Equity = Liabilities

C. Assets + Liabilities = Owner's Equity

D. Assets + Owner's Equity = Liabilities

2. Which of the following is the internal user of accounting information?

A. Managers

B. Investor

C. Public

D. Creditor

3. An example of a current asset found on a balance sheet is ___.

A. bank

B. Loan

C. creditors

D. Capital

4. When a business brought in personal computer for the use of the business, the effect will be ____.

A. An increase of assets

B. An increase in both assets and capital

C. An increase in both assets and liabilities

D. A decrease in both capital and liabilities

5. A withdrawal occurs when ___.

A. the owner of a company receipt of a loan from the owner's sister

B. the owner of a company put an additional investment of cash for the business

C. the owner of a company purchases a building from the proceeds of a bank loan

D. the owner of a company may need to take cash or other assets from a business

6. Which of the following would be classified as expenses?

A. Credit sales

B. Business rates

C. Interest received

D. Unearned revenues

7. Which of the following reflects the effects on the accounting equation of a receipt from debtor by cash?

A. Assets of cash increase, debtor decrease

B. Assets of cash decrease, debtor decrease

C. Assets cash increase, debtor increases

8. Credit entry may signify a(n) ____.

A. decrease in liability accounts

B. decrease in capital accounts

C. increase in the capital account

D. Increase in expense accounts