Guo chen L Equipament with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is a.$30,000 b. $35,000 e. $15,000 d $45,000 e, none of the above 2 Which of the following concepts relates to separating the reporting of business and personal a. cost concept b. unit of measure concept e. business entity concept d. objectivity concept e. none of the above 3. The accounting equation may be expressed as a. Assets-Equities- Liabilities b. Assets + Liabilities Stockholders' Equity e. Assets Revenues- Liabilities d. Assets Liabilities Stockholders' Equity e. None of the above 4. If total liabilitics decreased by $46,000 during a period of time and stockholder'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 a. $106,000 increase b. $14,000 increase c. $14,000 decrease d. $106,000 decrease e. None of the above Land, originally purchased for $30,000, is sold for $62,000 in cash. What is the effect of the sale on the accounting equation? a. assets increase $62,000; stockholders' equity increases $62,000 b. assets increase $32,000, stockholders' equity increases $32,000 5. e. assets increase $62,000, liabilities decrease $30,000, stockholders' equity increases $32,000 d. assets increase $30,000, no change for liabilities, stockholders' equity increases $62,000 e. none of the above the anets and liabilities of John Wong, DVM, are as folos Pabi1100 ha is the ut of wkbolden equity as of luly I of the current year $53,500 d 564,300 None of the above 1 he d oft couting peried, Decenber I, Hout's $575,000 and skhoer quity of $335.000. Using the accounting equatic case independently, determine the following amounts 31, of Year I, Hou's Financial Services has assets of Hu's liabilicies as of $575,000 $335,000 e40,000 d. $535,000 e. None of the above shwdelden' es a d shareholders' oquity decreased by $32,000. $325,000 $328,000 $335,000 d $382,000 None of the above Net income or net loss during Year 2, assuming that as of December 31, Year 2, assets were $592,000, liabilities were $450,000, and there were no additional investments or dividends. a. Net income of $142,000 b. Net loss of $193,000 Net income of $192,000 d. Net los of $124,000 e. None of the above c. 10. Computer Corporation is starting its computer programming business and has sold stock of 15,000. Identify how the accounting equation will be affected. a. increase assets (Cash) and increase liabilities (Accounts Payable) b. increase assets (Cash) and increase stockholders' equity (Capital Stock) e. increase assets(Accounts Receivable) and decrease liabilities (Accounts Payable d. increase assets (Cash) and increase assets (Accounts Receivable) e. none of the above 11 The Dividends account is an expense. a. True b. False 12 Prepaid expenses are an example of an expense. a. True b. False Which of the following entries records the payment of dividends? a. debit Common Stock; credit Cash b. debit Dividends; credit Cash c. debit Salaries Expense; credit Cash d. debit Salaries Expense; credit Salaries Payable e. none of the above 13 14 Which of the following entries records the acquisition of office supplies on account? a. Office Supplies, debit; Cash, credit b. Cash, debit; Office Supplies, credit c. Office Supplies, debit; Accounts Payable, credit d. Accounts Receivable, debit; Office Supplies, credit e. None of the above Which of the following entries records the payment of insurance for the current month? a. Cash, debit; Insurance Expense, credit b. Insurance Expense, debit, Cash, credit c. Insurance Expense, debit; Accounts Receivable, credit d. Prepaid Insurance, debit, Cash, credit e. None of the above 15 Which of the following is not a correct rule of debits and credits? a. Assets, expenses, and dividends are increased by debits. b. Assets are decreased by credits and have a normal debit balance. 16 c. Liabilities, revenues, and stockholders' equity are increased by credits. d. The normal balance for revenues and expenses is a credit. e. None of the above determines whether the normal balance of an account is a debit or credit e mwires that the dollar anount of debits equal the dollar amount of credits on a trial balance d states chat the revenses expenses e sone of the above The matking concep alrosses the velationship between the journal and the balance sheet period and related expenses should be reported in the same lavest cash in business. This jounal entry wil a. increase Common Stock and decrease Cash b. increase Cash and decrease Common Stock c. increase Cash and increase Common Stock d. decrease Cash and decrease Common Stock e. mone of the above 19 All of the following accounts are increased with a debit casset are b. Land .Accounts Receivable d. Cash e. None of the above 20 Reporting of revenues and expenses in the proper period is due to the accounting period concept aTrue .False A company depreciates its equipment $500 a year. The adjusting entry on December 31 is a debit to Depreciation Expense, $500, and a credit to Equipment, $500. 21 . True b. False 22 The revenue recognition concept a is not in conflict with the cash method of accounting b. determines when revenue is credited to a revenue account c states that revenuc is not recorded until the cash is received d. controls all rieanue reporting for the cash basis of accounting e. none of the above 23 The matching concept a. addresses the relationship between the jounal and the b. determines whether the c. requires that the d. states that the revenues and related expenses should be reported in the same period e. none of the above normal balance of an account is a debit or credit dollar amount of debits equal the dollar amount of credits on a trial balance 24 Using accrual accounting, revenue is recorded and reported only a. when cash is received without regard to when the services are rendered b. when the services are rendered without regard to when cash is received c. when cash is received at the time services are rendered d. if cash is received after the services are rendered e. none of the above 25 Which of the following is not a characteristic of the accrual basis of accounting? a. revenues and expenses are reported in the period in which cash is received or paid b. revenues are reported on the income statement in the period in which they are earned c. accrual basis of accounting supports the matching concept d. expenses are reported in the same period as the revenues to which they relate e. none of the above 26 The balance in the office supplies account on January 1 was $7,000, supplies purchased during January were $3,000, and the supplies on hand at January 30 were $2,000. The amount to be used for the appropriate adjusting entry is a. $4,300 b. $12,000 c. $5,000 d. $8,000 e. none of the above represents four months' rent paid on December 1. The adjusting entry required on December 31 is 27 The balance in the prepaid rent account before adjustment at the end of the year is $32,000, which a. debit Rent Expense, $8,000; credit Prepaid Rent, $8,000 b. debit Prepaid Rent, $24,000; credit Rent Expense, $8,000 c. debit Rent Expense, $24,000; credit Prepaid Rent, $8,000 d. debit Prepaid Rent, $8,000; credit Rent Expense,$8,000 e. none of the above