FABM 1 Review - Lesson 7

At the beginning of the year, Dref's Calling Station has liabilities of PHP 100,000 and owner's equity of PHP 96,000. If assets increased by PHP 40,000 and liabilities decreased by PHP 30,000, what was the owner's equity at the end of the year?

These are claims against customers arising from sale of services or goods on credit. This type of receivable offers less security than a promissory note.

The acquisition of an asset on credit ​ (a)  

• increases assets and liabilities
• leaves total assets unchanged
• increases assets and owner's equity
• decreases assets and increases liabilities

At the beginning of the year, the assets of Enzo Services were PHP 360,000 and its owner's equity was PHP 200,000. During the year, assets increased by PHP 120,000 and liabilities increased by PHP 20,000. What was the owner's equity at the end of the year?

All of the following affect the owner's equity account except: ​ ​ (a)  

• payment of a liability
• withdrawal by the owner
• additional investment

The liabilities of Kaori Stylist equal one-third of the total assets, and the owner's equity is PHP 240,000. What is the amount of the liabilities?

A revenue​ ​ (a)  

• increases assets and owner's equity
• leaves total assets unchanged
• increases assets and liabilities
• increases assets and decreases owner's equity

The basic summary device of accounting

Bethany Pest Control has assets of PHP 600,000 and owner's equity of PHP 450,000. Compute the amount of the missing element of financial position.

When an entity receives cash for services performed, ​ (a)  

• the owner's equity is increased
• an asset is decreased
• the owner's equity is decreased
• total assets remain unchanged