1) All of the following accounts would be considered assets
except
for:
A) Cash
B) Common Shares
C) Prepaid Expenses
D) Notes Receivable
2) The payment of an amount owed to a creditor would:
A) increase assets
B) increase liabilities
C) decrease net income
D) decrease liabilities
3) When a company performs a service and immediately collects the cash from the customer, which of the following would occur?
A) net income would increase
B) expenses would decrease
C) assets would decrease
D) shareholders' equity would decrease
4) Purchasing supplies and paying cash for them would:
A) increase total assets
B) decrease total assets
C) have no effect on total assets
D) increase total liabilities and shareholders' equity
5) Paying a utility bill would:
A) increase expenses
B) increase liabilities
C) increase owners' equity
D) decrease revenues
6) Borrowing money from the bank by signing a note payable would:
A) increase shareholders' equity
B) increase net income
C) decrease liabilities
D) have no effect on shareholders' equity
7) Receiving a payment from a customer on account would:
A) have no effect on shareholders' equity
B) increase net income
C) increase shareholders' equity
D) increase liabilities
8) The purchase of land for cash would:
A) increase total assets
B) decrease shareholders' equity
C) increase the total debits on the trial balance
D) not affect the total of debits or credits on the trial balance
9) An owner investment of a building, valued at $100,000 with an $80,000 outstanding mortgage, transferring this asset into the business would:
A) increase assets by $20,000
B) increase assets by $80,000
C) increase shareholders' equity by $20,000
D) increase shareholders' equity by $100,000
10) Performing services on account would:
A) increase assets and liabilities
B) increase assets and decrease shareholders' equity
C) increase revenue and decrease shareholders' equity
D) increase net income and shareholders' equity