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WorksheetsTransactions that Affect Owner's Equity - Chapter 2
Total questions: 24
Worksheet time: 14mins
A transaction is a normal business activity that changes assets, liabilities, or owner's equity.
True
False
Detailed information about changes in owner's equity is needed by owners and managers to make sound business decisions.
True
False
A transaction for the sale of goods or services results in an increase in owner's equity.
True
False
Revenue is a decrease in owner's equity resulting from the operation of a business.
True
False
When a company makes a sale of $300.00, assets and owner's equity increase by $300.00.
True
False
A revenue transaction decreases the sum of balances on the left side of an accounting equation.
True
False
Business expenses include payments for goods and services used to operate a business.
True
False
An expense is a decrease in owner's equity resulting from the operation of a business.
True
False
The accounting equation must remain in balance after the changes are caused by a transaction have been recorded.
True
False
Payments for advertising, equipment repairs, utilities, and rent are expense transactions.
True
False
Withdrawals are assets taken out of a business for the owner's personal use.
True
False
The most common type of withdrawal by an owner from a business is the withdrawal of cash.
True
False
When an owner withdraws cash from the business, the transaction affects both assets and owner's equity.
True
False
A decrease in owner's equity because of a withdrawal is a result of the normal operations of a business.
True
False
A withdrawal is an expense.
True
False
If a business received $2,000.00 from sales, this would:
increase assets and increase owner's equity
increase assets and decrease liabilities
increase liabilities and decrease owner's equity
decrease assets and decrease owner's equity
A transaction to pay for goods and services needed to operate a business results in a decrease in:
owner's equity
revenue
liabilities
expenses
If a business paid cash for repairs to equipment, this would:
increase owner's equity
increase liabilities
decrease owner's equity
decrease liabilities
If cash is paid for advertising,
two assets are changed
an asset and a liability are changed
an asset and owner's equity are changed
two liabilities are changed
When the owner withdraws cash for personal use,
liabilities increase and assets decrease
assets decrease and owner's equity increases
assets decrease and owner's equity decreases
liabilities decrease and assets decrease
Two transactions that decrease owner's equity are:
expenses and withdrawals
expenses and investments
withdrawals and investments
liabilities and expenses
A business paid cash for rent, $700.00; paid cash to the owner for personal use, $200.00; and paid cash for equipment, $50.00. Expenses from the operation of the business decrease owner's equity by:
$250.00
$750.00
$950.00
none of the above
An established business should rarely experience a decrease in:
cash
expenses
owner's equity
liabilities
A business prepares a balance sheet to report information about:
expenses incurred during a given period of time
revenue received during a given time
the business's assets, liabilities, and owner's equity
profit the business has made for the year
