Question 1

All of the following are classified as assets except:

Accepted Answer

Accounts Payable is a liability, not an asset. Assets are resources that a company owns and controls, with the expectation that they will provide future economic benefits. Accounts Payable is money owed by a company to its suppliers or creditors and represents a liability.

Question 2

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.There were no stockholder investments or dividends during the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Accepted Answer

Assets = Liabilities + Equity
Assets = $92,000 + (Beginning Equity + Revenues - Expenses)
Assets = $92,000 + ($145,000 + $210,000 - $165,000)
Assets = $92,000 + $190,000; Assets = $282,000

Question 3

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and dividends to stockholders of $9,000.There were no stockholder investments during the year.Calculate ending equity.

Accepted Answer

Ending Equity = Beginning Equity + Revenues ? Expenses + Stock Issuances - Dividends
Ending Equity = $72,000 + $90,000 ? $65,000 + $0 - $9,000
Ending Equity = $88,000

Question 4

Charlie's Chocolates' stockholders made investments of $50,000 and received dividends of $20,000.The company has revenues of $83,000 and expenses of $64,000.Calculate its net income.

Accepted Answer

Net Income = Revenues - Expenses
Net Income = $83,000 - $64,000; Net Income = $19,000

Question 5

Flitter reported net income of $17,500 for the past year.At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities.By the end of the year,assets had increased to $300,000 and liabilities were $75,000.Calculate its return on assets:

Accepted Answer

Return on Assets = Net Income/Average Assets
Return on Assets = $17,500/[($200,000 + $300,000)/2]
Return on Assets = $17,500/$250,000 = 0.07 = 7.0%

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

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 calculated by using the accounting equation: Assets = Liabilities + Equity. Rearranging the equation, Equity = Assets - Liabilities. Therefore, the change in equity is the difference between the increase in assets and the increase in liabilities, which is $55,000 - $25,000 = $30,000. Therefore, the correct answer is C, an increase of $30,000.

Question 8

All of the following are classified as assets except:

Accepted Answer

Accounts Payable are classified as liabilities, not assets.

Question 9

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

Accepted Answer

Net Increase/(Decrease) in Cash = Cash Flows from Operating Activities + Cash Flows from Investing Activities + Cash Flows from Financing Activities
Net Increase/(Decrease) in Cash = $27,000 + ($22,000) + ($12,000)
Net Increase/(Decrease) in Cash = ($7,000)

Question 10

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year.Its assets at the beginning of the year were $400,000.At the end of the year assets were worth $450,000.Calculate its return on assets.

Accepted Answer

Return on Assets = Net Income/Average Assets
Return on Assets = Revenues - Expenses/Average Assets
Return on Assets = ($80,000 - $50,000)/[($400,000 + $450,000)/2]
Return on Assets = $30,000/$425,000 = 0.0705 = 7.1%

Question 11

A company's balance sheet shows: cash $22,000,accounts receivable $16,000,office equipment $50,000,and accounts payable $17,000.What is the amount of stockholders' equity?

Accepted Answer

Assets = Liabilities + Equity
Cash + Accounts Receivable + Office Equipment = Accounts Payable + Equity
$22,000 + $16,000 + $50,000 = $17,000 + Equity
$88,000 = $17,000 + Equity; Equity = $71,000

Question 12

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

Accepted Answer

Cash is an asset account and is not included in the calculation of ending equity. The calculation of ending equity typically includes the beginning equity balance, plus or minus any net income or loss, plus any additional investments made by stockholders, minus any dividends paid out to stockholders. Revenues and expenses are also taken into account in determining net income or loss, while dividends and stockholder investments directly affect equity.

Question 13

All of the following are classified as liabilities except:

Accepted Answer

Accounts Receivable is actually an asset, as it represents money owed to the company by customers who have not yet paid for their purchases. The other options are all examples of liabilities, as they represent debts or obligations owed by the company to others.

Question 14

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

When Atkins Company collects $1,750 from a customer, cash (an asset) increases by $1,750, while accounts receivable (another asset) decreases by $1,750. This results in no net change in the accounting equation, as the increase in one asset is offset by the decrease in another asset.

Question 15

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

Rent expense (an expense account) increases by $2,000, which decreases equity (retained earnings) by $2,000. There is no effect on assets or liabilities as rent is an expense and not a transaction that directly affects the company's financial position.

Question 16

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 from Second National Bank, this transaction increases the assets of Billington Corp by $80,000 (cash). At the same time, the liabilities of Billington Corp also increase by $80,000 (loan payable). Therefore, the accounting equation for Billington Corp would be:

Assets = Liabilities + Equity
Increase in Cash (+$80,000) = Increase in Loan Payable (+$80,000) + No change in Equity

Therefore, the correct answer is D: Assets would increase $80,000 and liabilities would increase $80,000.

Question 17

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

If Long Company purchased equipment on credit, it would increase its assets (equipment) and increase its liabilities (accounts payable).

The other options would not cause both an increase in assets and an increase in liabilities. A) Cash received from providing services to a customer would only increase assets (cash), not liabilities. B) Cash received as a stockholder investment would only increase assets (cash), not liabilities. D) Supplies purchased for cash would increase assets (supplies) but not liabilities. E) Advertising expense paid in cash would only decrease assets (cash), not increase liabilities.

Question 18

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000,and dividends of $12,000.There were no stockholder investments during the year.Calculate the ending equity.

Accepted Answer

Ending Equity = Beginning Equity + Net Income + Stock Issuances - Dividends
Ending Equity = $52,000 + $35,000 + $0 - $12,000 = $75,000

Question 19

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 20

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 during the first month?

Accepted Answer

Assets and equity both increase at the time the rent is earned.

Quiz 1: Accounting in Business

All of the following are classified as assets except:

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and dividends to stockholders of $9,000.There were no stockholder investments during the year.Calculate ending equity.

Charlie's Chocolates' stockholders made investments of $50,000 and received dividends of $20,000.The company has revenues of $83,000 and expenses of $64,000.Calculate its net income.

Flitter reported net income of $17,500 for the past year.At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities.By the end of the year,assets had increased to $300,000 and liabilities were $75,000.Calculate its return on assets:

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?

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 assets except:

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year.Its assets at the beginning of the year were $400,000.At the end of the year assets were worth $450,000.Calculate its return on assets.

A company's balance sheet shows: cash $22,000,accounts receivable $16,000,office equipment $50,000,and accounts payable $17,000.What is the amount of stockholders' equity?

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

All of the following are classified as liabilities except:

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?

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?

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

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?

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000,and dividends of $12,000.There were no stockholder investments during the year.Calculate the ending 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?

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 during the first month?