Principles of Accounting I Module 1 Quiz

The assets and liabilities of a company are $128,000 and $84,000, respectively. Owner's equity should equal

• $212,000

• $44,000

• $128,000

• $84,000

All of the following are examples of external users of accounting information except

• government entities

• customers

• creditors

• managers

Owner withdrawals have what effect on the accounting equation?

• increases assets; increases liabilities

• increases liabilities; decreases owner's equity

• increases stockholders’ equity; decreases owner's equity

• decreases assets; decreases owner's equity

The receipt of cash for services provided has what effect on the accounting equation?

• increases assets; increases liabilities

• increases liabilities; decreases owner's equity

• increases assets; increases owner's equity

• decreases assets; decreases liabilities

No significant differences exist between the accounting standards issued by the FASB and the IASB.

• True

• False

Which of the following is an example of a retail business?

• book publisher

• hospital

• supermarket

• modular homebuilder

Which of the following comprises 70% of business entities in the United States?

• proprietorships

• partnerships

• corporations

• limited liability companies (LLCs)

Owner's equity at the beginning of the year for Atlas Services was $390,000, while its liabilities totaled $230,000. During the year, its assets increased by $75,000, and its liabilities decreased by $50,000. What is the amount of owner's equity at the end of the year for Atlas Services?

• $107,000

• $98,000

• $415,000

• $515,000

The liabilities and owner's equity of a business are $132,000 and $244,000, respectively. Assets should equal

• $188,000

• $132,000

• $376,000

• $112,000

As of the end of its accounting period, December 31, Year 1, Great Plains Company has assets of $940,000 and liabilities of $300,000. During Year 2, owners invested an additional $73,000 and made $33,000 in owner withdrawals from the business. What is the amount of net income during Year 2, assuming that as of December 31, Year 2, assets were $995,000 and liabilities were $270,000?

• $45,000

• $50,000

• $106,000

• $370,000