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f f f f f f f f f
CHAPTER 2 f
THE ACCOUNTING EQUATION AND TRANSACTION A
f f f f f
NALYSIS
TRUE-FALSE STATEMENTS f
1. Inforderftofpossessffuturefservicefpotential,fanfassetfmustfhavefphysicalfsubstance.
Ans:fFf LO1f BT:fKf Difficulty:fEasyf TOT:f.5fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
2. Owners'f claimsf tof totalf businessf assetsf takef precedencef overf thef claimsf off creditorsfbec
ausefownersfinvestfassetsfinfthefbusinessfandfarefliablefforflosses.
Ans:f Ff f LO1f f BT:f Kf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Ow
ner’sfEquity
3. ThefbasicfaccountingfequationfstatesfthatfAssetsf=fLiabilities.
Ans:fFf LO1f BT:fKf Difficulty:fEasyf TOT:f.5fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fBasicf Acc
ountingfEquation
4. Internalf transactionsf dof notf affectf thef basicf accountingf equationf becausef theyf aref econ
omicfeventsfthatfoccurfentirelyfwithinfonefcompany.
Ans:f Ff f LO1f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Busi
nessfTransactions
5. Thef basicf accountingf equationf isf inf balancef whenf thef creditorf andf ownershipf claimsfagai
nstfthefbusinessfequalfthefassets.
Ans:fTf LO1f BT:fKf Difficulty:fEasyf TOT:f.5fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fBasicf Acc
ountingfEquation
6. Accountantsfrecordfbothfinternalfandfexternalftransactions.
Ans:f Tf f LO2f f BT:f Kf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Busi
nessfTransactions
7. Thef purchasef off storef equipmentf forf cashf reducesf assetsf andf owner'sf equityf byf equalfamo
unts.
Ans:f Ff f LO2f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f TransactionfA
nalysis
8. Thefpurchasefoffofficefequipmentfonfcreditfincreasesftotalfassetsfandftotalfliabilities.
Ans:f Tf f LO2f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f TransactionfA
nalysis
9. Externalf transactionsf involvef economicf eventsf betweenf thef companyf andf somef otherfent
erpriseforfparty.
Ans:f Tf f LO2f f BT:f Kf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Busi
nessfTransactions
10. Thefpurchasefoffsuppliesfonfcreditfincreasesftotalfassetsfandftotalfliabilities.
Ans:f Tf f LO2f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f TransactionfA
nalysis
11. Whenf af companyf borrowsf moneyf fromf thef bank,f theftransactionf increasesf totalf assetsfandf
totalfliabilities.
mynursytest.store
,DOWNLOAD THE Test Bank for College Accounting 1st Edition Weygandt
f f f f f f f f f
2f-f2 TestfBankfforfCollege,fFirstfEdition
Ans:f Tf f LO2f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Trans
actionfAnalysis
12. Expensesfarefthefcostsfincurredfinfthefprocessfgeneratingfrevenue.
Ans:f Tf f LO3f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Expen
ses
13. Bothfownerfinvestmentsfandfrevenuesfincreaseftotalfassetsfandfowner’sfequity.
Ans:f Tf f LO3f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Expan
dedfAccountingfEquation
14. Revenuesf resultf fromf thef deliveryf off goods,f thef performancef off servicesf andf ownerfinvest
ments.
Ans:f Ff f LO3f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Reven
ues
15. Thefperformancefoffservicesfforfcashfincreasesftotalfassetsfandftotalfowner’sfequity.
Ans:f Tf f LO3f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Expan
dedfAccountingfEquation
16. Thefpaymentfoffrentfexpensefreducesfowner’sfequity.
Ans:f Tf f LO4f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Transa
ctionfAnalysisfUsingfthefExpandedfAccountingfEquation
17. Thefcollectionfoffanfaccountsfreceivablefincreasesftotalfassets.
Ans:f Ff f LO4f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Trans
actionfAnalysisfUsingfthefExpandedfAccountingfEquation
18. Thef effectf off anf investmentf byf thef ownerf hasf thef oppositef impactf onf thef accountingfequa
tionfoffafwithdrawalfbyfthefowner.
Ans:fTf LO4f BT:f Cf Difficulty:f Mediumf TOT:f .5fmin.f AACSB:f Nonef AICPAf FC:f MeasurementfAnalysisfandf Interpretation;f Subtopic:f Trans
actionfAnalysisfUsingfthefExpandedfAccountingfEquation
19. Thef withdrawalf off cashf fromf thef businessf byf thef ownerf decreasesf assetsf andf owner’sfequi
ty.
Ans:f Tf f LO4f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Trans
actionfAnalysisfUsingfthefExpandedfAccountingfEquation
20. Owner’sfdrawingsfarefanfexpensefoffthefbusiness.
Ans:f Ff f LO4f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Trans
actionfAnalysisfUsingfthefExpandedfAccountingfEquation
FORfINSTRUCTORfUSEfONLY
mynursytest.store
, DOWNLOAD THE Test Bank for College Accounting 1st Edition Weygandt
f f f f f f f f f
ThefAccountingfEquationfandfTransactionfAnalysis 2f-f3
MULTIPLE CHOICE QUESTIONS
f f
21. Thefresourcesfafbusinessfownsfare
a. assets.
b. liabilities.
c. owner’sfequity.
d. transactions.
Ans:faf LO1f BT:fKf Difficulty:fEasyf TOT:f1.0fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
22. Rightsforfclaimsfagainstfresourcesfbyfcreditorsfare
a. assets.
b. liabilities.
c. owner’sfequity.
d. transactions.
Ans:f bf f LO1f BT:f Kf f Difficulty:f Easyf f TOT:f 1.0f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Liab
ilities
23. Rightsforfclaimsfagainstfresourcesfbyfownersfare
a. assets.
b. liabilities.
c. owner’sfequity.
d. transactions.
Ans:f cf f LO1f BT:f Kf f Difficulty:f Easyf f TOT:f 1.0f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Ow
ner’sfEquity
24. Whichfofftheffollowingfaccountsfisfnotfanfasset?
a. AccountsfPayable
b. AccountsfReceivable
c. Cash
d. Supplies
Ans:faf LO1fBT:fKf Difficulty:fEasyf TOT:f1.0fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
25. Allfofftheffollowingfaccountsfarefassetsfexcept
a. Owner’sfCapital
b. AccountsfReceivable
c. Cash
d. Equipment
Ans:faf LO1fBT:fKf Difficulty:fEasyf TOT:f1.0fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
26. Whichfofftheffollowingfaccountsfisfnotfanfasset?
a. AccountsfReceivable
b. ServicefRevenue
c. Equipment
d. Supplies
Ans:fbf LO1fBT:fKf Difficulty:fEasyf TOT:f1.0fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
27. Whichfofftheffollowingfaccountsfisfnotfafliability?
a. SalesfTaxfPayable
b. AccountsfPayable
c. AccountsfReceivable
d. UltilitiesfPayable
FORfINSTRUCTORfUSEfONLY
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f f f f f f f f f
CHAPTER 2 f
THE ACCOUNTING EQUATION AND TRANSACTION A
f f f f f
NALYSIS
TRUE-FALSE STATEMENTS f
1. Inforderftofpossessffuturefservicefpotential,fanfassetfmustfhavefphysicalfsubstance.
Ans:fFf LO1f BT:fKf Difficulty:fEasyf TOT:f.5fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
2. Owners'f claimsf tof totalf businessf assetsf takef precedencef overf thef claimsf off creditorsfbec
ausefownersfinvestfassetsfinfthefbusinessfandfarefliablefforflosses.
Ans:f Ff f LO1f f BT:f Kf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Ow
ner’sfEquity
3. ThefbasicfaccountingfequationfstatesfthatfAssetsf=fLiabilities.
Ans:fFf LO1f BT:fKf Difficulty:fEasyf TOT:f.5fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fBasicf Acc
ountingfEquation
4. Internalf transactionsf dof notf affectf thef basicf accountingf equationf becausef theyf aref econ
omicfeventsfthatfoccurfentirelyfwithinfonefcompany.
Ans:f Ff f LO1f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Busi
nessfTransactions
5. Thef basicf accountingf equationf isf inf balancef whenf thef creditorf andf ownershipf claimsfagai
nstfthefbusinessfequalfthefassets.
Ans:fTf LO1f BT:fKf Difficulty:fEasyf TOT:f.5fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fBasicf Acc
ountingfEquation
6. Accountantsfrecordfbothfinternalfandfexternalftransactions.
Ans:f Tf f LO2f f BT:f Kf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Busi
nessfTransactions
7. Thef purchasef off storef equipmentf forf cashf reducesf assetsf andf owner'sf equityf byf equalfamo
unts.
Ans:f Ff f LO2f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f TransactionfA
nalysis
8. Thefpurchasefoffofficefequipmentfonfcreditfincreasesftotalfassetsfandftotalfliabilities.
Ans:f Tf f LO2f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f TransactionfA
nalysis
9. Externalf transactionsf involvef economicf eventsf betweenf thef companyf andf somef otherfent
erpriseforfparty.
Ans:f Tf f LO2f f BT:f Kf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Busi
nessfTransactions
10. Thefpurchasefoffsuppliesfonfcreditfincreasesftotalfassetsfandftotalfliabilities.
Ans:f Tf f LO2f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f TransactionfA
nalysis
11. Whenf af companyf borrowsf moneyf fromf thef bank,f theftransactionf increasesf totalf assetsfandf
totalfliabilities.
mynursytest.store
,DOWNLOAD THE Test Bank for College Accounting 1st Edition Weygandt
f f f f f f f f f
2f-f2 TestfBankfforfCollege,fFirstfEdition
Ans:f Tf f LO2f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Trans
actionfAnalysis
12. Expensesfarefthefcostsfincurredfinfthefprocessfgeneratingfrevenue.
Ans:f Tf f LO3f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Expen
ses
13. Bothfownerfinvestmentsfandfrevenuesfincreaseftotalfassetsfandfowner’sfequity.
Ans:f Tf f LO3f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Expan
dedfAccountingfEquation
14. Revenuesf resultf fromf thef deliveryf off goods,f thef performancef off servicesf andf ownerfinvest
ments.
Ans:f Ff f LO3f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Reven
ues
15. Thefperformancefoffservicesfforfcashfincreasesftotalfassetsfandftotalfowner’sfequity.
Ans:f Tf f LO3f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Expan
dedfAccountingfEquation
16. Thefpaymentfoffrentfexpensefreducesfowner’sfequity.
Ans:f Tf f LO4f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Transa
ctionfAnalysisfUsingfthefExpandedfAccountingfEquation
17. Thefcollectionfoffanfaccountsfreceivablefincreasesftotalfassets.
Ans:f Ff f LO4f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Trans
actionfAnalysisfUsingfthefExpandedfAccountingfEquation
18. Thef effectf off anf investmentf byf thef ownerf hasf thef oppositef impactf onf thef accountingfequa
tionfoffafwithdrawalfbyfthefowner.
Ans:fTf LO4f BT:f Cf Difficulty:f Mediumf TOT:f .5fmin.f AACSB:f Nonef AICPAf FC:f MeasurementfAnalysisfandf Interpretation;f Subtopic:f Trans
actionfAnalysisfUsingfthefExpandedfAccountingfEquation
19. Thef withdrawalf off cashf fromf thef businessf byf thef ownerf decreasesf assetsf andf owner’sfequi
ty.
Ans:f Tf f LO4f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Trans
actionfAnalysisfUsingfthefExpandedfAccountingfEquation
20. Owner’sfdrawingsfarefanfexpensefoffthefbusiness.
Ans:f Ff f LO4f f BT:f Cf f Difficulty:f Easyf f TOT:f .5f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Trans
actionfAnalysisfUsingfthefExpandedfAccountingfEquation
FORfINSTRUCTORfUSEfONLY
mynursytest.store
, DOWNLOAD THE Test Bank for College Accounting 1st Edition Weygandt
f f f f f f f f f
ThefAccountingfEquationfandfTransactionfAnalysis 2f-f3
MULTIPLE CHOICE QUESTIONS
f f
21. Thefresourcesfafbusinessfownsfare
a. assets.
b. liabilities.
c. owner’sfequity.
d. transactions.
Ans:faf LO1f BT:fKf Difficulty:fEasyf TOT:f1.0fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
22. Rightsforfclaimsfagainstfresourcesfbyfcreditorsfare
a. assets.
b. liabilities.
c. owner’sfequity.
d. transactions.
Ans:f bf f LO1f BT:f Kf f Difficulty:f Easyf f TOT:f 1.0f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Liab
ilities
23. Rightsforfclaimsfagainstfresourcesfbyfownersfare
a. assets.
b. liabilities.
c. owner’sfequity.
d. transactions.
Ans:f cf f LO1f BT:f Kf f Difficulty:f Easyf f TOT:f 1.0f min.f f AACSB:f Nonef f AICPAf FC:f Measurementf Analysisf andf Interpretationf Subtopic:f Ow
ner’sfEquity
24. Whichfofftheffollowingfaccountsfisfnotfanfasset?
a. AccountsfPayable
b. AccountsfReceivable
c. Cash
d. Supplies
Ans:faf LO1fBT:fKf Difficulty:fEasyf TOT:f1.0fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
25. Allfofftheffollowingfaccountsfarefassetsfexcept
a. Owner’sfCapital
b. AccountsfReceivable
c. Cash
d. Equipment
Ans:faf LO1fBT:fKf Difficulty:fEasyf TOT:f1.0fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
26. Whichfofftheffollowingfaccountsfisfnotfanfasset?
a. AccountsfReceivable
b. ServicefRevenue
c. Equipment
d. Supplies
Ans:fbf LO1fBT:fKf Difficulty:fEasyf TOT:f1.0fmin.f AACSB:fNonef AICPAf FC:fMeasurementfAnalysisfandfInterpretationfSubtopic:fAssets
27. Whichfofftheffollowingfaccountsfisfnotfafliability?
a. SalesfTaxfPayable
b. AccountsfPayable
c. AccountsfReceivable
d. UltilitiesfPayable
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