Accounting Multiple Choice Questions

A owner’s investment of cash into the business will

• Decrease total assets

• Decrease total liabilities

• Increase owner’s equity

• Have no effect on total assets

Purchasing a laptop computer on account will

• increase total assets

• have no effect on owner's equity

• increase total liabilities

• all of the above

Performing a service on account will

• increase total liabilities

• increase owner’s equity

• increase total assets

• increase assets and owner's equity

Receiving cash from a customer on account will

• increase total assets

• decrease liabilities

• increase shareholders’ equity

• have no effect on total assets

Purchasing computer equipment for cash will

• decrease both total assets and owner's equity

• decrease both total liabilities and owner's equity

• have no effect on total assets, total liabilities, or owner's equity

• increase both total assets and total liabilities

Purchasing a building for $110,000 by paying cash of $15,000 and signing a note payable for $95,000 will

• decrease total assets and increase total liabilities by $15,000

• increase both total assets and total liabilities by $95,000

• increase both total assets and total liabilities by $110,000

• decrease total assets and total liabilities by $15,000

Which of the following transactions will increase an asset and increase a liability?

• Purchasing office equipment for cash

• Paying an account payable

• Buying equipment on account

• Issuing shares

Which of the following transactions will increase an asset and increase owner's equity

• Performing a service on account for a customer

• Borrowing money from a bank

• Purchasing supplies on account

• Collecting cash from a customer on an account receivable

Which of the following is not an asset account?

• Service Revenue

• Owner's Capital

• Salary Expense

• None of the above account is an asset

Which statement is false?

• Dividends are increased by credits

• Assets are increased by debits

• Revenues are increased by credits

• Liabilities are decreased by debits