A business started the current period with liabilities of $71,000 and Equity of $37,000. During the period the following business transactions took place. 1. Purchased equipment for $43,000; paying $17,000 cash and issuing a note payable for the balance. 2. Received $2,700 of the amount owed by a customer for services provided on account. 3. Paid $5,700 of the amount owed for supplies purchased on account. 4. Provided services of $3,500 on account. 5. Paid $1,900 towards rent for the current period. Determine the assets of the business at the end of the period. a. $146,100 b. $120,100 c. $55,900 d. $129,900

D. $129,900

A company prepares four basic financial statements: 1.Balance Sheet 2. Statement of Cash Flows 3. Statement of Retained Earnings 4. Income Statement. These are prepared in the following order: a. 4,1,2,3 b. 4,3,1,2 c. 1,4,3,2 d. 1,3,4,2

B. 4,3,1,2

Since the accounting equation must remain in balance after each transaction, a transaction that causes an increase in an asset, may also cause a. An increase in a liability b. An increase in another asset c. A decrease in owner's equity d. A decrease in a liability

A. An increase in a liability

An example of resources owned by a company is a. Accounts Payable b. Accounts Receivable c. Common Stock d. Retained Earnings

B. Accounts Receivable

Determine Net Income, if a corporation had total assets of $600,000 and total equity of $225,000 at the beginning of the year, and assets increased by $150,000 and liabilities increased by $60,000, and no other transactions occurred except a dividend payment of $45,000 and revenues and expenses. a. $135,000 b. $45,000 c. $90,000 d. $105,000

A. $135,000

On October 1, 2008, the Vice President for Sales of a manufacturing business entered into a contract with a merchandising company to sell 50,000 cases of their product to the merchandising company at a price of $1,500,000. The product is delivered to the merchandising company in June , 2009. The accounting principle that requires the manufacturing company to record revenues of $1,500,000 in June 2009 instead of October 2008 would be the? a. Going Concern principle b. Cost principle c. Business entity principle d. Revenue recognition principle e. Monetary unit principle

D. Revenue recognition principle

Which of the following statements best describes the effects of recording revenue earned by a business entity? a. Equity increases only when Credit Sales are made and Assets increase only when cash sales are made. b. Assets increase and Equity increases only when cash sales are made. c. Both Assets and Equity increase for Cash and Credit sales. d. Assets increase, however, Equity remains unchanged when credit sales are made.

C. Both assets and equity increase for cash and credit sales

The Securities and Exchange Commission (SEC) is: a. primarily responsible for setting GAAP. b. involved with setting accounting standards for Government entities. c. concerned with setting reporting requirements for U.S. companies that issue stock to the public. d. involved with setting broad rules and principles that are used by the accounting profession.

C. concerned with setting reporting requirements for U.S. companies that issue stock to the public

Which of the following statements is true with respect to the time element of Financial Statements? a. The Statement of Retained Earnings explains changes in retained earnings during a particular period. b. The Balance Sheet covers a period of time. c. The Income Statement, Statement of Retained Earnings and the Balance Sheet are all prepared as of a specific date. d. The Income Statement lists amounts at a particular point in time.

A. The Statement of Retained Earnings explains changes in retained earnings during a particular period.

Aztec Company is selling a piece of land adjacent to their business. An appraisal reported the market value of the land to be $100,000. The Majestic Company initially offered to buy the land for $87,000. The companies settled on a purchase price of $95,000. On the same day, another piece of land on the same block sold for $102,000. Under the cost concept, what is the amount that will be used to record this transaction in the accounting records? a. $102,000 b. $95,000 c. $87,000 d. $100,000

B. $95,000

A Consulting company provided services to some customers on account and some customers for cash. The effect of providing these services is: a. increase in one asset, decrease in another asset and increase in owner's equity b. increase in assets, increase in owner's equity c. increases in assets and liabilities d. increase in assets, increase in liabilities and increase in owner's equity.

B. increase in assets, increase in owner's equity

There are four transactions that affect Owner's equity. Which are the two transactions that increase owner's equity? a. Revenues and Additional investments b. Expenses and Dividends c. Additional Investments and Expenses d. Revenues and Expenses

A. Revenues and Additional investments

A Company had Assets of $159,000 and Liabilities of $84,000 on May 1 of the current year. There were no transactions that took place between May 1 and May 4. On May 4, the company had the following two transactions: 1. Services performed for a customer for $15,000; only $7,000 of which were received in Cash. 2. Repaid $4,000 of the $18,000 owed to a supplier. Determine the total Stockholder's Equity after the transactions for May 4 are recorded? a. $258,000 b. $82,000 c. $162,000 d. $90,000

D. $90,000

At the end of the year, a corporation had total Expenses of $80,000; Assets of $112,000; Net Income of $12,000 and a total Stockholder's Equity of $60,000. Given these facts, what are the amount of Revenues and Liabilities? a. Insufficient information to determine. b. Revenues $140,000 and Liabilities $172,000 c. Revenues $68,000 and Liabilities $72,000 d. Revenues $92,000 and Liabilities $52,000

D. Revenues $92,000 and Liabilities $52,000

Which of the following statements is false with respect to a Balance Sheet? a. The balance sheet reports the amount of assets, liabilities and stockholder's equity of an entity at a point in time. b. The retained earnings balance shown on the balance sheet must agree with the ending retained earnings balance shown on the statement of retained earnings. c. The balance sheet reports the changes in assets, liabilities and stockholder's equity over a period of time. d. The accounts shown on the balance sheet represent the basic accounting equation for a particular business entity