CSO 1.1

Questions 1 -5 relate to CSO 1.1 Objective 1..1: Describe and use the accounting equation The accounting equation may be expressed as A. Assets + Liabilities = Owner's Equity B. Assets - Liabilities = Owner's Equity C. Assets = Revenues - Liabilities D. Assets = Equities - Liabilities 2. Which of the following is not an asset? A. cash B. wages payable C. inventory D. investments 25 26 3 The assets and liabilities of the company are $128,000 and $84,000, respectively. Owner's equity should equal 29 A. 44,000 30 B. 84,000 31 C. 128,000 32 D. 212,000 33 39 A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the 40 4 accounting equation was to 41 42 A. decrease an asset, decrease a liability 43 B. increase an asset, increase owner's equity 44 C. increase an asset, increase a liability 45 D. increase an asset, decrease another asset 46 52 If total liabilities decreased by $46,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is 53 15 54 55 A. 14,000 increase 56 B. 106,000 decrease 57 C. 14,000 decrease 58 D. 106,000 increase 59