Harvard - Chapter 1 - The Accounting
Equation Study Guide Test.
Charlie Longbottom is excited to get his new web storage site up and running. He purchased two new
servers for $5,000 each that he will install in his server room. Charlie was given 30 days credit terms for
the servers. How will this purchase impact the accounting equation? Select all that apply. - CORRECT
ANSWER Assets = up 10k
Liabilities = up 10k
Qingji Corp., an oil separator manufacturer, received an advance payment of $50,000 on Aug. 1 for an
order of five oil separators. Qingji Corp. delivered the five oil separators on Nov 1. How will the
accounting equation be impacted when this advance payment was recorded on Aug. 1? Select all that
apply. - CORRECT ANSWER Assets = up 50k
Liabilities = up 50k
Tom's T.V.'s sold one of their premium products, a new 60" flat screen 3D T.V. to a customer who paid
$2,000 in cash. How would the receipt of payment from this sale impact the accounting equation? Select
all that apply - CORRECT ANSWER Assets = up 20K
Equity = up 20k
P&P Accountants, an audit firm, bills $35,000 to AQG Industries for audit work performed related to the
annual audit. P&P requests payment in 15 days. How would this impact the accounting equation of
P&P? Select all that apply. - CORRECT ANSWER Assets = up 35k
Equity = up 35k
Simon's Shoe Store (SSS) purchased 500 pairs of shoes from their sports shoe supplier, Feet of
Endurance (FOE), for $20,000. SSS is a good customer of FOE so they were given 30 days to pay for the
shoes. The 30 days expired and SSS paid FOE for the shoes. How will this payment impact the accounting
equation on the books of SSS? Select all that apply. - CORRECT ANSWER Assets = down 20k
Liabilities = down 20k
Equation Study Guide Test.
Charlie Longbottom is excited to get his new web storage site up and running. He purchased two new
servers for $5,000 each that he will install in his server room. Charlie was given 30 days credit terms for
the servers. How will this purchase impact the accounting equation? Select all that apply. - CORRECT
ANSWER Assets = up 10k
Liabilities = up 10k
Qingji Corp., an oil separator manufacturer, received an advance payment of $50,000 on Aug. 1 for an
order of five oil separators. Qingji Corp. delivered the five oil separators on Nov 1. How will the
accounting equation be impacted when this advance payment was recorded on Aug. 1? Select all that
apply. - CORRECT ANSWER Assets = up 50k
Liabilities = up 50k
Tom's T.V.'s sold one of their premium products, a new 60" flat screen 3D T.V. to a customer who paid
$2,000 in cash. How would the receipt of payment from this sale impact the accounting equation? Select
all that apply - CORRECT ANSWER Assets = up 20K
Equity = up 20k
P&P Accountants, an audit firm, bills $35,000 to AQG Industries for audit work performed related to the
annual audit. P&P requests payment in 15 days. How would this impact the accounting equation of
P&P? Select all that apply. - CORRECT ANSWER Assets = up 35k
Equity = up 35k
Simon's Shoe Store (SSS) purchased 500 pairs of shoes from their sports shoe supplier, Feet of
Endurance (FOE), for $20,000. SSS is a good customer of FOE so they were given 30 days to pay for the
shoes. The 30 days expired and SSS paid FOE for the shoes. How will this payment impact the accounting
equation on the books of SSS? Select all that apply. - CORRECT ANSWER Assets = down 20k
Liabilities = down 20k
