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Acct. Ch. 3- Accounting Equation & Business Transactions

Total questions: 46

Worksheet time: 44mins

Name
Class
Date
1.

The accounting equation should remain in balance after each transaction

a)

True

b)

False

2.

A business transaction affects at least 2 accounts

a)

True

b)

False

3.

"Assets + Liabilities = Owner Equity" is another way to express the accounting equation

a)

True

b)

False

4.

The increase and decrease caused by business transaction are recorded in specific accounts

a)

True

b)

False

5.

The private enterprise system is based on the right to own property

a)

True

b)

False

6.

The Owner's personal financial transaction are part of the business records

a)

False

b)

True

7.

The total financial claims to the assets of a business are referred to as equity

a)

True

b)

False

8.

The owner's claim to the assets of a business are liabilities

a)

True

b)

False

9.

When a business transaction occurs, the financial position of the business changes

a)

True

b)

False

10.

A creditor has a financial claim to the assets of a business

a)

True

b)

False

11.

An account is a record of only the increase in the balance of a specific item such as a cash or equipment

a)

True

b)

False

12.

The total financial claims do not have to equal the total cost of the property

a)

True

b)

False

13.

If the creditor's financial claim to property totals $1,000 and the owner's financial claim to property totals $11,000 the property value is...

a)

10,000

b)

11,000

c)

12,000

d)

1,000

14.

The account receivable is an example of a(n)...

a)

Asset

b)

Liability

c)

Owner's Equity

15.

All of the following account names are asset names, except...

a)

Office Furniture

b)

Accounts Payable

c)

Cash in Bank

d)

Equipment

16.

If a business has assets of $5,600 and liabilities of $900, the owner's equity is...

a)

6,500

b)

900

c)

4,700

d)

5,600

17.

A business transaction that involves a purchase on account is considered to be a(n)...

a)

Cash transaction

b)

Credit Transaction

c)

Investment by the owner

d)

Expense transaction

18.

If a business purchases a calculator on account, the accounts affected by this transaction are...

a)

Cash in Bank & Accounts Payable

b)

Office Equipment & Accounts Receivables

c)

Office Equipment & Cash in Bank

d)

Office Equipment & Accounts Payable

19.

Each of the following is a business expense, except payment for...

a)

Advertisement

b)

Monthly Rent

c)

Utility Bills

d)

Equipment

20.

The purchase of a desk on account will increase Office Furniture and will also increase...

a)

Cash in Bank

b)

Accounts Payable

c)

Accounts Receivables

d)

Jon McIvey, Capital

21.

Represents a company's obligations to pay off a short term debt to its creditors or suppliers

a)

Accounts Receivable

b)

Accounts Payable

c)

Credit

d)

Equity

22.

Balance of the money due to a firm for goods or services delivered or used but not yet paid for by customers.

a)

Accounts Receivable

b)

Accounts Payable

c)

Credit

d)

Equity

23.

When you buy something and agree to pay for it later.

a)

Debt

b)

Equity

c)

Credit

d)

expense

24.

The business or person selling you the item on credit

a)

Debt

b)

Credit

c)

Financial Claim

d)

Creditor

25.

The accounting term for the financial claim to the assets

a)

Expense

b)

Financial Claim

c)

Investment

d)

Equity

26.

Is the cost of products or services used to operate a business

a)

Expense

b)

Financial Claim

c)

Investment

d)

Equity

27.

Is a legal right to an item

a)

Expense

b)

Financial Claim

c)

Investment

d)

On account

28.

Is money or other property paid out in order to produce profit

a)

Property

b)

Investment

c)

On Account

d)

Financial claim

29.

When a business buys an item on credit

a)

Property

b)

Investment

c)

On Account

d)

Financial claim

30.

Is anything of value that a person or business owns and therefore controls

a)

Property

b)

Investment

c)

On Account

d)

Financial claim

31.

What is the classification of the following account:

John Jones Capital

a)

Asset

b)

Liability

c)

Owners Equity

32.

What is the classification of the following account:

Cash In Bank

a)

Asset

b)

Liability

c)

Owners Equity

33.

What is the classification of the following account:

Account Receivable

a)

Asset

b)

Liability

c)

Owners Equity

34.

What is the classification of the following account:

Account Payable

a)

Asset

b)

Liability

c)

Owners Equity

35.

What is the classification of the following account:

Office Equipment

a)

Asset

b)

Liability

c)

Owners Equity

36.

What is the classification of the following account:

Delivery Equipment

a)

Asset

b)

Liability

c)

Owners Equity

37.

What is the classification of the following account:

Building

a)

Asset

b)

Liability

c)

Owners Equity

38.

What is the classification of the following account:

Land

a)

Asset

b)

Liability

c)

Owners Equity

39.

What Accounts are being affected? Indicate which account is increased or decreased:

Regina Delgado, the owner, invested $25,000 cash in

the business.

4 lines
40.

What Accounts are being affected? Indicate which account is increased or decreased:

Bought car wash equipment with cash for $12,000.

4 lines
41.

What Accounts are being affected? Indicate which account is increased or decreased:

Purchased, on account, $2,500 of office equipment.

4 lines
42.

What Accounts are being affected? Indicate which account is increased or decreased:

Wrote a check for the monthly rent, $800.

4 lines
43.

What Accounts are being affected? Indicate which account is increased or decreased:

Received cash for services performed, $1,000.

4 lines
44.

What Accounts are being affected? Indicate which account is increased or decreased:

The owner withdrew $600 cash from the business

for personal use.

4 lines
45.

What Accounts are being affected? Indicate which account is increased or decreased:

Purchased a desk for $1,000, paying $200 cash

and agreeing to pay the balance of $800 in 30 days.

4 lines
46.

What Accounts are being affected? Indicate which account is increased or decreased:

Provided services worth $600 on account.

4 lines

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