Question 1

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:

Accepted Answer

The change in equity can be found by using the accounting equation: Assets = Liabilities + Equity. 
Rearranging the equation, we get: Equity = Assets - Liabilities. 
If the assets increased by $55,000 and the liabilities increased by $25,000, then the change in equity must be:
$55,000 - $25,000 = $30,000
Therefore, the answer is choice C, an increase of $30,000.

Question 2

All of the following are classified as liabilities except:

Accepted Answer

Supplies are classified as assets, not liabilities, as they represent goods or materials that the company owns and plans to use in its operations. The other answer choices are all examples of liabilities, representing amounts that the company owes to others and will be paid in the future.

Question 3

If a company has excess space in its building that it rents to another company for $700, what is the effect on the accounting equation when the first rent payment is collected?

Accepted Answer

Cash collected is an increasing asset and the rental of the space generates a revenue, which increases equity.

Question 4

All of the following are classified as liabilities except:

Accepted Answer

The answer of All of the following are classified as...

Question 5

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities. Which of the following transactions could have caused that effect?

Accepted Answer

The purchase of equipment on credit would increase the assets of Long Company (through the addition of the equipment) and increase its liabilities (through the addition of the credit obligation). None of the other transactions would have this effect.

Question 6

The accounting equation for Ying Company shows a decrease in its assets and a decrease in its equity. Which of the following transactions could have caused that effect?

Accepted Answer

The answer of The accounting equation for Ying Company shows...

Question 7

All of the following are classified as assets except:

Accepted Answer

Accounts Payable is a liability, not an asset.

Question 8

Billington Corp borrows $80,000 cash from Second National Bank. How does this transaction affect the accounting equation for Billington?

Accepted Answer

When Billington Corp borrows $80,000 cash from Second National Bank, it increases their assets by $80,000 in cash and also increases their liabilities by $80,000 in the form of a loan. Therefore, the accounting equation is affected by an increase in both assets and liabilities, resulting in choice D being the correct answer.

Question 9

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?

Accepted Answer

Paying rent decreases assets (cash) by $2,000, which in turn decreases equity by the same amount. Therefore, option B is the correct choice. Option A is incorrect because rent payment does not decrease liabilities. Option C and D are incorrect because rent payment does not increase assets or liabilities. Option E is incorrect because rent payment does not decrease liabilities.

Question 10

Which of the following accounts is not included in the calculation of a company's ending stockholders' equity?

Accepted Answer

Ending stockholders' equity includes revenues, expenses, dividends, and common stock but does not include cash.

Question 11

A company's balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

Accepted Answer

Assets - Equity = Liabilities
Cash + Accounts Receivable + Equipment - Equity = Liabilities
$24,000 + $30,000 + $50,000 - $72,000 = $32,000

Question 12

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?

Accepted Answer

The answer of Atkins Company collected $1,750 as payment for...

Question 13

The accounts of Mason Company at the end of the past year report the following amounts:
$\begin{array}{llcc}
  \text { Accounts } &\text {Amount   } \
 \hline\text { Dividends..................} &\$15,500\
 \text {Revenues............................  } &\$79,000\
 \text {Expenses..................................  } &\$43,800\
 \text { Common stock.............. } &2,000\

\end{array}$

If the beginning equity for the year was $173,000, calculate the ending equity for Mason Company.

Accepted Answer

The answer of The accounts of Mason Company at the...

Question 14

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

Accepted Answer

The answer of Identify and describe the two main groups...

Question 15

What is the balance sheet? What is its purpose?

Accepted Answer

The answer of What is the balance sheet? What is...

Question 16

Explain the role of accounting in the information age.

Accepted Answer

The answer of Explain the role of accounting in the...

Question 17

How does the objectivity principle support ethical behavior?

Accepted Answer

The answer of How does the objectivity principle support ethical...

Question 18

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Accepted Answer

The answer of Describe the income statement and the relation...

Question 19

Describe the three types of activities reported on the statement of cash flows.

Accepted Answer

The answer of Describe the three types of activities reported...

Question 20

Identify several opportunities in accounting and distinguish between private accounting and public accounting.

Accepted Answer

The answer of Identify several opportunities in accounting and distinguish...

Quiz 1: Accounting in Business

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:

All of the following are classified as liabilities except:

If a company has excess space in its building that it rents to another company for $700, what is the effect on the accounting equation when the first rent payment is collected?

All of the following are classified as liabilities except:

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities. Which of the following transactions could have caused that effect?

The accounting equation for Ying Company shows a decrease in its assets and a decrease in its equity. Which of the following transactions could have caused that effect?

All of the following are classified as assets except:

Billington Corp borrows $80,000 cash from Second National Bank. How does this transaction affect the accounting equation for Billington?

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?

Which of the following accounts is not included in the calculation of a company's ending stockholders' equity?

A company's balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

What is the balance sheet? What is its purpose?

Explain the role of accounting in the information age.

How does the objectivity principle support ethical behavior?

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Describe the three types of activities reported on the statement of cash flows.

Identify several opportunities in accounting and distinguish between private accounting and public accounting.