Accounting Ch 1 Questions and Graded Answers.
The definition of revenues includes which of the following statements?
a) Revenues are creditor's claims against the company.
b) Revenues increase equity
c) Revenues are the sales of products or services to customers by a business
d) Revenues are resources owned or controlled by a company - b&c
Bakery Company receives its utility bill of $800 for the month and pays it immediately. Record
this transaction in the accounting equation - Increase expenses and decrease cash
Expenses - Decrease equity and are the cost of assets or services used to earn revenue
Revenues - Increase equity and are the assets earned from a company's earning activities
Withdrawals - Decrease equity and are the assets removed from the company for personal
use
Investments - Increase equity and are assets an owner puts into the business
Given the list of accounts below, identify which of them would appear on a balance sheet:
Utilities Expense, Rent Expense, Equipment, Cash, Rental Revenue, Accounts Payable, Retained
Earnings, Supplies - Equipment, Cash, Accounts Payable, Retained Earnings, Supplies
Which of the following correctly depicts the accounting equation? - Assets = Liabilities +
Equity
To record the purchase of supplies for cash, the correct entry into the accounting equation would
include an increase to _________ and a decrease to ________. - supplies; cash
, Jackson's Catering Company provided cookies worth $3,000 to the local college. The college
paid immediately. Record this transaction in Jackson's Catering Company accounting equation
by: - Increasing cash; increasing revenues
Johna's Plant Nursery pays the salaries of its two employees. How will this transaction affect the
accounting equation? - Salaries expense will be increased; Equity will be decreased
Given the following list of accounts, identify which are classified as assets:
Wages Payable, Land, Dividends, Building, Cash, Accounts Receivable, Common Stock,
Supplies - Land, Building, Cash, Accounts Receivable, Supplies
On 6/25, supplies costing $1,000 were purchased, but only $400 of this amount was paid on
6/25. The remainder of the bill went on account. To record this transaction on 6/25: Supplies
would be increased by $_______; Cash would be decreased by $______; and Accounts Payable
would be increased by $_______. - 1,000; 400; 600
Owner investments cause a(n) _______ in equity and are entered directly in the _________
account. - Increase; common stock
Which statement(s) below define(s) an asset?
a) Resources controlled by the business
b) An amount owed to an owner
c) An amount owed
d) An amount owed to a creditor
e) Resources with future benefits - a, c, e
How would you characterize a company's Accounts Receivable account? - It is an asset
account
The definition of revenues includes which of the following statements?
a) Revenues are creditor's claims against the company.
b) Revenues increase equity
c) Revenues are the sales of products or services to customers by a business
d) Revenues are resources owned or controlled by a company - b&c
Bakery Company receives its utility bill of $800 for the month and pays it immediately. Record
this transaction in the accounting equation - Increase expenses and decrease cash
Expenses - Decrease equity and are the cost of assets or services used to earn revenue
Revenues - Increase equity and are the assets earned from a company's earning activities
Withdrawals - Decrease equity and are the assets removed from the company for personal
use
Investments - Increase equity and are assets an owner puts into the business
Given the list of accounts below, identify which of them would appear on a balance sheet:
Utilities Expense, Rent Expense, Equipment, Cash, Rental Revenue, Accounts Payable, Retained
Earnings, Supplies - Equipment, Cash, Accounts Payable, Retained Earnings, Supplies
Which of the following correctly depicts the accounting equation? - Assets = Liabilities +
Equity
To record the purchase of supplies for cash, the correct entry into the accounting equation would
include an increase to _________ and a decrease to ________. - supplies; cash
, Jackson's Catering Company provided cookies worth $3,000 to the local college. The college
paid immediately. Record this transaction in Jackson's Catering Company accounting equation
by: - Increasing cash; increasing revenues
Johna's Plant Nursery pays the salaries of its two employees. How will this transaction affect the
accounting equation? - Salaries expense will be increased; Equity will be decreased
Given the following list of accounts, identify which are classified as assets:
Wages Payable, Land, Dividends, Building, Cash, Accounts Receivable, Common Stock,
Supplies - Land, Building, Cash, Accounts Receivable, Supplies
On 6/25, supplies costing $1,000 were purchased, but only $400 of this amount was paid on
6/25. The remainder of the bill went on account. To record this transaction on 6/25: Supplies
would be increased by $_______; Cash would be decreased by $______; and Accounts Payable
would be increased by $_______. - 1,000; 400; 600
Owner investments cause a(n) _______ in equity and are entered directly in the _________
account. - Increase; common stock
Which statement(s) below define(s) an asset?
a) Resources controlled by the business
b) An amount owed to an owner
c) An amount owed
d) An amount owed to a creditor
e) Resources with future benefits - a, c, e
How would you characterize a company's Accounts Receivable account? - It is an asset
account
