Accounting I-Chapter 3 Review

After each business transaction, the basic accounting equation should remain in balance.

• True

• False

A business transaction affects at least two accounts.

• True

• False

Assets + Liabilities = Owner's Equity is another way to express the accounting equation.

• True

• False

The increases and decreases caused by business transactions are recorded in specific accounts.

• True

• False

What do you call the owner's claim to the assets of the business?

• Assets

• Liabilities

• Owner's Equity

• Equities

What is the creditor's claim to the assets of the business called?

• Assets

• Liabilities

• Owner's Equity

• Equities

If the creditor's claim to the property is $1,000 and the owner's claim to the property is $ 11,000, What is total value of the property?

• $10,000

• $11,000

• $12,000

• $1,000

How do you classify Accounts Receivable

• Asset

• Liability

• Revenue

• Owner's Equity

All the following account names are assets except which one?

• Office Furniture

• Accounts Payable

• Cash in Bank

• Equipment

A business transaction that involves a purchase on account is considered what type of transaction?

• cash transaction

• investment by owner

• credit transaction

• expense transaction