Question 1 of 20 0.0/ 5.0 Points If total liabilities are $1,000 and total assets are $8,000, owner’s equity must be A. $7,000. B. $3,000. C. $10,000. D. $13,000. Question 2 of 20 0.0/ 5.0 Points If total assets are $30,000 and total liabili

Question 1 of 20

0.0/ 5.0 Points

If total liabilities are $1,000 and total assets are $8,000, owner’s equity must be

[removed] A. $7,000.
[removed] B. $3,000.
[removed] C. $10,000.
[removed] D. $13,000.

Question 2 of 20

0.0/ 5.0 Points

If total assets are $30,000 and total liabilities are $18,000, capital must equal

[removed] A. $12,000.
[removed] B. $28,000.
[removed] C. $8,000.
[removed] D. $20,000.

Question 3 of 20

0.0/ 5.0 Points

Which of the following is an advantage of a sole proprietorship form of business?

[removed] A. There’s limited personal risk.
[removed] B. The business can continue indefinitely.
[removed] C. The owner makes all the decisions.
[removed] D. All of the above

Question 4 of 20

0.0/ 5.0 Points

The claims of creditors against the assets are

[removed] A. expenses.
[removed] B. revenues.
[removed] C. liabilities.
[removed] D. owner’s equity.

Question 5 of 20

0.0/ 5.0 Points

How does the purchase of office equipment on account affect the accounting equation?

[removed] A. Assets increase, and liabilities decrease.
[removed] B. Assets increase, and owner’s equity increases.
[removed] C. Assets increase, and liabilities increase.
[removed] D. Liabilities increase, and owner’s equity decreases.

Question 6 of 20

5.0/ 5.0 Points

The purpose of the accounting process is to provide financial information about

[removed] A. sole proprietorships.
[removed] B. small businesses.
[removed] C. large corporations.
[removed] D. All of the above

Question 7 of 20

0.0/ 5.0 Points

Logan’s Motor Sports buys $30,000 of equipment on credit. Which of the following is a true statement?

[removed] A. Total assets increase.
[removed] B. Total assets are unchanged.
[removed] C. Total liabilities decrease.
[removed] D. Total liabilities are unchanged.

Question 8 of 20

5.0/ 5.0 Points

If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in the owner’s equity amount?

[removed] A. Increase of $2,000
[removed] B. Decrease of $2,000
[removed] C. Increase of $10,000
[removed] D. Decrease of $10,000

Question 9 of 20

5.0/ 5.0 Points

A legal firm would be considered a

[removed] A. merchandise company.
[removed] B. manufacturer.
[removed] C. service company.
[removed] D. None of the above

Question 10 of 20

5.0/ 5.0 Points

Which of the following is a characteristic of a sole proprietorship?

[removed] A. The business is owned by more than one person.
[removed] B. It’s easy to form.
[removed] C. Each stockholder acts as an owner of the company.
[removed] D. It can continue indefinitely.

Question 11 of 20

0.0/ 5.0 Points

The type of business organization that can continue indefinitely is known as a

[removed] A. sole proprietorship.
[removed] B. partnership.
[removed] C. corporation.
[removed] D. None of the above

Question 12 of 20

0.0/ 5.0 Points

Bonnie’s Baskets purchases $4,000 worth of office equipment on account. This causes

[removed] A. Cash and Capital to decrease.
[removed] B. Office Equipment and Accounts Payable to increase.
[removed] C. Office Equipment to decrease and Accounts Payable to increase.
[removed] D. Accounts Payable to increase and Capital to decrease.

Question 13 of 20

0.0/ 5.0 Points

The Sarbanes-Oxley Act was passed to

[removed] A. prevent fraud at public companies.
[removed] B. replace all of the old accounting procedures with new ones.
[removed] C. improve the accuracy of the company’s financial reporting.
[removed] D. Both A and C

Question 14 of 20

5.0/ 5.0 Points

Exam 1

Strum Hardware has total assets of $50,000. What are the total assets if new equipment is purchased for $10,000 cash?

[removed] A. $45,000
[removed] B. $50,000
[removed] C. $55,000
[removed] D. $60,000

Question 15 of 20

5.0/ 5.0 Points

A partnership is a business that

[removed] A. is easy to form.
[removed] B. ends with the death of a partner.
[removed] C. is owned by more than one person.
[removed] D. All of the above

Question 16 of 20

5.0/ 5.0 Points

Assets are equal to

[removed] A. liabilities + owner’s equity.
[removed] B. liabilities – owner's equity.
[removed] C. liabilities – revenues.
[removed] D. revenues – expenses.

Question 17 of 20

0.0/ 5.0 Points

The purchase of supplies for cash would affect which account category?

[removed] A. Assets
[removed] B. Liabilities
[removed] C. Capital
[removed] D. Expense

Question 18 of 20

0.0/ 5.0 Points

The balance sheet contains

[removed] A. liabilities, expenses, and capital.
[removed] B. assets, liabilities, and revenues.
[removed] C. expenses, assets, and cash.
[removed] D. assets, liabilities, and owner’s equity.

Question 19 of 20

5.0/ 5.0 Points

Which of the following would result if a business purchased equipment with a 40% down payment in cash?

[removed] A. Equipment would increase, and Cash would decrease.
[removed] B. Accounts Payable would increase.
[removed] C. Since the equipment hasn’t been paid in full, there’s nothing to record.
[removed] D. Both A and B

Question 20 of 20

5.0/ 5.0 Points

A corporation

[removed] A. can continue indefinitely.
[removed] B. is owned by stockholders.
[removed] C. has limited risk to stockholders.
[removed] D. All of the above

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Question 1 of 20 0.0/ 5.0 Points If total liabilities are $1,000 and total assets are $8,000, owner’s equity must be A. $7,000. B. $3,000. C. $10,000. D. $13,000. Question 2 of 20 0.0/ 5.0 Points If total assets are $30,000 and total liabili

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