11.Liabilities can be defined as
a.resources under an organization's legal control
b.obligations owed by an organization to its creditors
c.the amount of investment made by owners in a business
d.the profits earned by a corporation
12.Owners’equity will decrease when
a.owners receive money from their corporation
b.an organization's profits are reinvested in the company
c.an organization borrows money
d.an organization pays cash for equipment
13.Which one of the following is NOT an asset?
a.revenue
b.cash
c.inventory
d.equipment
14.Which of the following is the correct representation of the accounting equation?
a.Assets = Liabilities + Owners' Equity - (Revenues - Expenses)
b.Assets + (Revenues + Expenses) = Liabilities + Owners' Equity
c.Assets + Liabilities + Owners' Equity = Revenues - Expenses
d.Assets - Liabilities = Owners' Equity + (Revenues - Expenses)
15.Which of the following is NOT one of the categories of accounts used by the accounting information system?
a.asset
b.liability
c.cash flow
d.expense
16.During an accounting period, total assets increased by $500 while owners’ equity increased by $800. The change in total liabilities during this period must have been a
a.$300 increase
b.$300 decrease
c.$1,300 increase
d.$1,300decrease
17.Which of the following accounts is a liability?
a.interest expense
b.interest payable
c.interest revenue
d.interest receivable
18.The record that reflects changes in dollar amounts associated with a specific resource or activity is referred to as a(n)
a.transaction
b.system
c.balance
d.account
19.A transaction is
a.a record of increases and decreases in the dollar amount associated with a resource
b.an event that causes increases or decreases in an account balance
c.another term for the accounting process
d.a check register for a bank account
20.Marvin and Clark formed a sports marketing partnership. Each contributed $60,000 cash to the new company. When this information is recorded in the new company's accounting system, it will affect which of the following?
a.assets only
b.assets and liabilities
c.assets and owners' equity
d.liabilities and owners' equity