E)
$38,500 increase.
178)
Zapper has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and
investments by owners of $6,000. Its ending equity is:
A) $274,000. B) $208,000. C) $223,000. D) $268,000. E) $240,000.
179)
Cragmont has beginning equity of $277,000, net income of $63,000, withdrawals of $25,000 and
no additional investments by owners during the period. Its ending equity is:
A) $189,000. B) $315,000. C) $365,000. D) $239,000. E) $277,000.
180)
Rent expense appears on which of the following statements?
A)
Statement of owner’s equity.
B)
Balance sheet.
C)
Statement of periodic expenses.
D)
Income statement.
E)
Statement of cash flows only.
181)
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 owner’s equity?
A) $17,000. B) $71,000. C) $105,000. D) $88,000. E) $29,000.
182)
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. Liabilities at the end of the year
totaled $92,000. What are the total assets of the company at the end of the year?
A) $92,000. B) $45,000. C) $282,000. D) $98,000. E) $210,000.
183)
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:
A) 23.3%. B) 35.0%. C) 8.8%. D) 7.0%. E) 5.8%.
184)
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) 20.0%. B) 6.7%. C) 7.1%. D) 18.8%. E) 7.5%.
185)
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.
A)
$37,000 increase.
B)
$34,000 decrease.
C)
$61,000 increase.
D)
$7,000 increase.
E)
$7,000 decrease.
186)
Charlie’s Chocolates’ owner made investments of $50,000 and withdrawals of $20,000. The
company has revenues of $83,000 and expenses of $64,000. Calculate its net income.
A) $49,000. B) $64,000. C) $19,000. D) $30,000. E) $83,000.
187)
Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000,
and withdrawals by owners of $9,000. Calculate the ending equity.
A) $97,000. B) $38,000. C) $88,000. D) $47,000. E) $25,000.
188)
Doc’s Ribhouse had beginning equity of $52,000; net income of $35,000, and withdrawals by the
owner of $12,000. The owner made no investments during the year. Calculate the ending equity.
A) $29,000. B) $(5,000). C) $75,000. D) $5,000. E) $99,000.
189)
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?
A) $176,000. B) $68,000. C) $32,000. D) $76,000. E) $104,000.
190)
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?
A)
Liabilities would decrease $700 and equity would increase $700.
B)
Assets would increase $700 and equity would increase $700.
C)
Assets would decrease $700 and equity would increase $700.
D)
Assets would increase $700 and equity would decrease $700.
E)
Assets would decrease $700 and liabilities would decrease $700.
191)
All of the following are classified as assets except:
A)
Accounts Payable.
B)
Land.
C)
Equipment.
D)
Accounts Receivable.
E)
Supplies.
192)
Which of the following accounts is not included in the calculation of a company’s ending owner’s
equity?
A)
Cash.
B)
Revenues.
C)
Expenses.
D)
Owner investments.
E)
Withdrawals.
193)
All of the following are classified as liabilities except:
A)
Wages Payable.
B)
Accounts Payable.
C)
Taxes Payable.
D)
Notes Payable.
E)
Accounts Receivable.
194)
Billington Corp. borrows $80,000 cash from Second National Bank. How does this transaction
affect the accounting equation for Billington?
A)
Assets would increase $80,000 and equity would decrease $80,000.
B)
Assets would decrease $80,000 and equity would increase $80,000.
C)
Assets would decrease $80,000 and liabilities would decrease $80,000.
D)
Liabilities would decrease $80,000 and equity would increase $80,000.
E)
Assets would increase $80,000 and liabilities would increase $80,000.
195)
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:
A)
A decrease of $80,000.
B)
An increase of $25,000.
C)
An increase of $30,000.
D)
A decrease of $30,000.
E)
An increase of $80,000.
196)
All of the following are classified as assets except:
A)
Prepaid Insurance.
B)
Accounts Receivable.
C)
Supplies.
D)
Accounts Payable.
E)
Cash.
197)
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?
A)
Assets would increase $2,000 and equity would increase $2,000.
B)
Liabilities would decrease $2,000 and equity would increase $2,000.
C)
Assets would decrease $2,000 and equity would decrease $2,000.
D)
Assets would increase $2,000 and liabilities would increase $2,000.
E)
Assets would decrease $2,000 and liabilities would decrease $2,000.
198)
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?
A)
Assets would increase $1,750 and equity would increase $1,750.
B)
Liabilities would decrease $1,750 and equity would increase $1,750.
C)
One asset would increase $1,750 and a different asset would decrease $1,750, causing no net
change in the accounting equation.
D)
Assets would decrease $1,750 and liabilities would decrease $1,750.
E)
Assets would increase $1,750 and liabilities would increase $1,750.
199)
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?
A)
Cash was received from providing services to a customer.
B)
A utility bill was received for the current month, to be paid in the following month.
C)
The company paid an amount due on credit.
D)
Equipment was purchased for cash.
E)
Advertising expense for the month was paid in cash.
200)
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?
A)
Supplies were purchased for cash.
B)
Cash was received from providing services to a customer.
C)
Cash was received as an owner investment.
D)
Equipment was purchased on credit.
E)
Advertising expense for the month was paid in cash.
201)
The expense recognition principle, also called the matching principle:
A)
Provides guidance on when a company must recognize revenue.
B)
Prescribes that a company report the details behind financial statements that would impact
users’ decisions.
C)
Prescribes that accounting information is based on actual cost.
D)
Prescribes that a company record the expenses it incurred to generate the revenue reported.
E)
Means that accounting information reflects a presumption that the business will continue
operating instead of being closed or sold.
202)
The measurement principle, also called the cost principle:
A)
Means that accounting information reflects a presumption that the business will continue
operating instead of being closed or sold.
B)
Prescribes that a company record the expenses it incurred to generate the revenue reported.
C)
Prescribes that a company report the details behind financial statements that would impact
users’ decisions.
D)
Provides guidance on when a company must recognize revenue.
E)
Prescribes that accounting information is based on actual cost.
203)
The revenue recognition principle:
A)
Provides guidance on when a company must recognize revenue.
B)
Prescribes that a company record the expenses it incurred to generate the revenue reported.
C)
Prescribes that a company report the details behind financial statements that would impact
users’ decisions.
D)
Prescribes that accounting information is based on actual cost.
E)
Means that accounting information reflects a presumption that the business will continue
operating instead of being closed or sold.
204)
The full disclosure principle:
A)
Means that accounting information reflects a presumption that the business will continue
operating instead of being closed or sold.
B)
Prescribes that a company record the expenses it incurred to generate the revenue reported.
C)
Prescribes that a company report the details behind financial statements that would impact
users’ decisions.
D)
Prescribes that accounting information is based on actual cost.
E)
Provides guidance on when a company must recognize revenue.
205)
The materiality constraint:
A)
Prescribes that only information that would influence the decisions of a reasonable person
need be disclosed.
B)
Means that accounting information reflects a presumption that the business will continue
operating instead of being closed or sold.
C)
Provides guidance on when a company must recognize revenue.
D)
Prescribes that accounting information is based on actual cost.
E)
Prescribes that a company record the expenses it incurred to generate the revenue reported.