ACC101 Chapter 1, 2, 3, 4 with
Complete Solutions
*Provide descriptions for this transaction:*
*Increase cash $1,000 and Increase equity $1,000*
a. Investment of cash in business by owner or performed services for cash
b. Investment of cash in business by owner
c. Performed services for cash
d. Collected cash from customers - ANS-A
*The financial statement that reports whether the business earned a profit and also lists
the revenues and expenses is called:*
a. A Balance sheet.
b. A Statement of owner's equity.
c. A Statement of cash flows.
d. An Income statement. - ANS-D
*Textron Stores purchased a car that cost $35,000. The firm made a payment of $5,000
cash and the balance on credit. Show the general journal entry to record this
transaction.*
a. Debit Cash $5,000
Debit Account payable $30,000
Credit Car $35,000
b. Debit Cash $5,000
Credit Account payable $30,000
Credit Car $ 35,000
c. Debit Car $ 5,000
Credit Cash $5,000
d. Debit Car $35,000
Credit Cash $5,000
Credit Account payable $30,000
e. Debit Car $30,000
Credit Account payable $30,000 - ANS-D
*On September 30, the Cash account of Value Company had a normal balance of
$5,000. During September, the account was debited for a total of $12,200 and credited
, for a total of $11,500. What was the balance in the Cash account at the beginning of
September?*
a. A $0 balance.
b. A $4,300 debit balance.
c. A $4,300 credit balance.
d. A $5,700 debit balance.
e. A $5,700 credit balance. - ANS-B
*Items used in business operations, such as office pens and paper are several samples
of:*
a. Office expense
b. Office supplies
c. Office equipment
d. Prepaid rent - ANS-B
*Under the accrual basis of accounting, revenues are reported when the*
a. Cash is received
b. Service or goods have been delivered
c. Contracts have been signed
d. Trading negotiation has been done - ANS-B
*The company collected $5,000 cash from accounts receivable. What is the effect on
accounting equation?*
A. Assets increase, Liabilities increase
B. Assets increase, Equity increases
C. Assets decrease, Liabilities decrease
D. Assets, Liabilities, Equity do not change - ANS-D
*Photometer Company paid off $30,000 of its accounts payable in cash. What would be
the effects of this transaction on the accounting equation?*
a. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase.
b. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.
c. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect.
d. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase.
e. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease. - ANS-B
*The proper journal entry to record the services of $500 completed on credit is:*
a. Dr. Cash 500
Cr. Accounts Receivable 500
b. Dr. Accounts Receivable 500
Cr. capital Stock 500
c. Dr. Accounts Receivable 500
Cr. Service Revenue 500
Complete Solutions
*Provide descriptions for this transaction:*
*Increase cash $1,000 and Increase equity $1,000*
a. Investment of cash in business by owner or performed services for cash
b. Investment of cash in business by owner
c. Performed services for cash
d. Collected cash from customers - ANS-A
*The financial statement that reports whether the business earned a profit and also lists
the revenues and expenses is called:*
a. A Balance sheet.
b. A Statement of owner's equity.
c. A Statement of cash flows.
d. An Income statement. - ANS-D
*Textron Stores purchased a car that cost $35,000. The firm made a payment of $5,000
cash and the balance on credit. Show the general journal entry to record this
transaction.*
a. Debit Cash $5,000
Debit Account payable $30,000
Credit Car $35,000
b. Debit Cash $5,000
Credit Account payable $30,000
Credit Car $ 35,000
c. Debit Car $ 5,000
Credit Cash $5,000
d. Debit Car $35,000
Credit Cash $5,000
Credit Account payable $30,000
e. Debit Car $30,000
Credit Account payable $30,000 - ANS-D
*On September 30, the Cash account of Value Company had a normal balance of
$5,000. During September, the account was debited for a total of $12,200 and credited
, for a total of $11,500. What was the balance in the Cash account at the beginning of
September?*
a. A $0 balance.
b. A $4,300 debit balance.
c. A $4,300 credit balance.
d. A $5,700 debit balance.
e. A $5,700 credit balance. - ANS-B
*Items used in business operations, such as office pens and paper are several samples
of:*
a. Office expense
b. Office supplies
c. Office equipment
d. Prepaid rent - ANS-B
*Under the accrual basis of accounting, revenues are reported when the*
a. Cash is received
b. Service or goods have been delivered
c. Contracts have been signed
d. Trading negotiation has been done - ANS-B
*The company collected $5,000 cash from accounts receivable. What is the effect on
accounting equation?*
A. Assets increase, Liabilities increase
B. Assets increase, Equity increases
C. Assets decrease, Liabilities decrease
D. Assets, Liabilities, Equity do not change - ANS-D
*Photometer Company paid off $30,000 of its accounts payable in cash. What would be
the effects of this transaction on the accounting equation?*
a. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase.
b. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.
c. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect.
d. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase.
e. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease. - ANS-B
*The proper journal entry to record the services of $500 completed on credit is:*
a. Dr. Cash 500
Cr. Accounts Receivable 500
b. Dr. Accounts Receivable 500
Cr. capital Stock 500
c. Dr. Accounts Receivable 500
Cr. Service Revenue 500
