1.What is the effect on the accounting equation of the following transaction in October 2019: "The owner of the business withdrew $1,000 for personal use"?

a. Decrease assets and decrease owners' equity

b. Decrease assets and increase liabilities

c. Decrease assets and increase owners' equity

d. Increase assets and decrease liabilities

e. Increase assets and increase liabilities

2.What account increases and what account decreases as a result of the following transaction in October 2019: "Paid insurance for the following 12 months"?

a. Prepaid insurance account increases & Insurance expense account increases

b. Insurance expense account decreases & cash account decreases

c. Prepaid insurance account increases & cash account decreases

d. Prepaid insurance account decreases & cash account decreases

e. Insurance expense account increases & cash account decreases

3.An owner pays her private motor vehicle insurance from the business bank account. This is

a business event.

a personal transaction.

a business transaction.

not a transaction.

a personal transaction and a business transaction.

4.An example of a personal transaction would be:

a. None of the options is correct

b. the owner paying his car registration from his personal credit card

c. buying school supplies for the owner's children on a company credit card

d. the owner paying the business insurance from his personal bank account

e. lunch paid for by the business

5.Tom and Jerry formed a partnership trading as T & J Financial Services. Their partnership agreement states that they agree to split any profit or loss in the proportion of their contributions to the partnership. At 30 June 2019 the Partner's Equity is as follows: Tom: $144,000; Jerry: $176,000. At 31 December T & J made a cash profit of $18,000. How would this profit share between Tom and Jerry?

a. Tom: $0; Jerry: $18,000

b. Tom: $9,900; Jerry: $8,100

c. Tom: $8,100; Jerry: $9,900

d. Tom: $9,000; Jerry: $9,000

e. Tom: $18,000; Jerry: $0

• 6.Hannah's Take Away is a small caf that specializes in Italian take away food. During June, the following data was provided by the business.How much is the value added to the food sold by Hannah's Take Away?

Sales to customers

$19,500

Cost of products sold

6,750

Cost of rented building and equipment

4,376

Cost of employees

3,750

Maintenance cost and utilities

2,000

a. $19,500

b. There is no value added

c. $2,624

d. $6,750

e. $16,876