Exam 1, Chapter 1 - Practice Questions

Question 1

Equipment is found on the ___(a)___ because it is an ___(b)___ (more specifically it is a/an ___(c)___)

Answer 1

a. balance sheet
b. asset
c. long term asset

Question 2

Fees earned are found on the ___(a)___ because they are a/an ___(b)___

Answer 2

a. income statement

b. revenue

Question 3

Retained earnings are found on the ___(a)___ in ___(b)___ section because they are a/an ___(c)____

Answer 3

a. balance sheet
b. shareholders’ equity
c. asset

Question 4

Wages are on the ___(a)___ because they are ___(b)___

Answer 4

a. income statement

b. expense

Question 5

Patents are on the ___(a)___ because they are a/an ___(b)___, specifically they are a/an ___(c)___

Answer 5

a, balance sheet

b. asset
c. long term asset

Question 6

Cost of goods sold are on the ___(a)___ because they are a/an ___(b)___, specifically they are a/an ___(c)___

Answer 6

a. income statement
b. expense
c. operating expense

Question 7

Common stock is on the ___(a)___ because it is a/an ___(b)___, specifically it is a/an ___(c)___

Answer 7

a. balance sheet
b. equity
c. shareholder equity

Question 8

Dividends payable are on the ___(a)___ because they are a/an ___(b)___

Answer 8

a. balance sheet

b. liability

Question 9

Accumulated depreciation is on the ___(a)___ because it is a ___(b)___, specifically, it is a ___(c)___ because it is ___(d)___

Answer 9

a. balance sheet
b. asset
c. long term asset
d. contra asset account to your equipment account

Question 10

Prepaid expenses are found on the ___(a)___ because they are a/an ___(b)___, specifically it is a ___(c)___

Answer 10

a. balance sheet
b. asset
c. current asset

Question 11

Gain is on the ___(a)___ because it is a/an ___(b)___

Answer 11

a. income statement

b. revenue

Question 12

Rent revenue is on the ___(a)___ because it is a/an ___(b)___

Answer 12

a. income statement

b. revenue

Question 13

Supplies are on the ___(a)___ because they are a/an ___(b)___, specifically they are a/an ___(c)___

Answer 13

a. balance sheet
b. asset
c. current asset

Question 14

Inventory is on the ___(a)___ because it is a/an ___(b)___, specifically they are a/an ___(c)___

Answer 14

a. balance sheet
b. asset
c. current asset

Question 15

Accounts receivable are on the ___(a)___ because they are a/an ___(b)___, specifically they are a/an ___(c)___

Answer 15

a. balance sheet
b. asset
c. current asset

Question 16

Land is on the ___(a)___ because it is a/an ___(b)___, specifically it is a/an ___(c)___

Answer 16

a. balance sheet
b. asset
c. long term asset

Question 17

Interest payable is on the ___(a)___ because it is a/an ___(b)___, specifically it is a/an ___(c)___

Answer 17

a. balance sheet
b. liability
c. short term liability

Question 18

Deferred revenue or unearned revenue is on the ___(a)___ because it is a/an ___(b)___, specifically this is a/an ___(c)____

Answer 18

a. balance sheet
b. liability
c. current liability

Question 19

An account payable is on the ___(a)___ because it is a ___(b)___

Answer 19

a. balance sheet

b. liability

Question 20

Cash is on the ___(a)___, and the ___(b)___ because it is a/an ___(a)___

Answer 20

a. statement of cash flows
b. balance sheet
c. asset

Question 21

Accounts receivable are on the ___(a)___ because they are a/an ___(b)___

Answer 21

a. balance sheet

b. asset

Question 22

Rent expense is on the ___(a)___ because it is a/an ___(b)___

Answer 22

a. income statement

b. expense

Question 23

Service revenue is on the ___(a)___ because it is a/an ___(b)___

Answer 23

a. income statement

b. Revenue

Question 24

Office supplies are on the ___(a)___ because they are a/an ___(b)___

Answer 24

a. balance sheet

b. asset

Question 25

Dividends are on the ___(a)___ because they are ___(b)___

Answer 25

a. statement of retained earnings

b. equity/dividends

Question 26

Salaries are on the ___(a)___ because they are a/an ___(b)___

Answer 26

a. income statement

b. expense

Question 27

Earned revenue from video rentals on account results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 27

a. increase asset
b. accounts receivable
c, increase equity
d. rental revenue

Question 28

Received cash of $10,000 results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 28

a. increase asset
b. cash
c. increase equity
d. common stock

Question 29

Purchased office furniture on account results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 29

a. increase asset
b. office furniture
c. increase liability
d. accounts payable

Question 30

Received cash on account in the amount of $300 results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 30

a. Increased asset
b. cash
c. decrease asset
d. accounts receivable

Question 31

Paid cash on account in the amount of $100 results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 31

a. decrease asset
b. cash
c. decrease liability
d. accounts payable

Question 32

Rented merchandise and received $200 results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 32

a. increase asset
b. cash
c. increase equity
d. rental revenue

Question 33

Paying monthly office rent results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 33

a. decrease asset
b. cash
c. decrease equity
d. rent expense

Question 34

Paying $100 cash to purchase office supplies results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 34

a. decrease asset
b. cash
c. increase asset
d. office supplies

Question 35

Receiving cash from issuance of common stocks results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 35

a. increase asset
b. cash
c. increase equity
d. common stock

Question 36

Cash purchase of land for a building site results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 36

a. increase asset
b. land
c. decrease asset
d. cash

Question 37

Paying cash on accounts payable results in results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 37

a. decrease asset
b. cash
c. decrease liability
d. accounts payable

Question 38

Purchasing equipment and signing a notes payable results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 38

a. increase asset
b. equipment
c. increase liability
d. notes payable

Question 39

Performing a service for a customer on account results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 39

a. increase asset
b. accounts receivable
c. increase equity
d. service revenue

Question 40

Employees worked for the week but will be paid next Tuesday results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 40

a. increase liability
b. salaries payable
c. decrease equity
d. salaries expense

Question 41

Receiving cash from a customer on an accounts receivable results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 41

a. increase asset
b. cash
c. decrease asset
d. accounts receivable

Question 42

Borrowing money from a bank results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 42

a. increase asset
b. cash
c. increase liability
d. notes payable

Question 43

Cash dividends paid to stockholders results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 43

a. decrease asset
b. cash
c. decrease equity
d. equity - dividends

Question 44

Incurring utility expenses on account results in ___(a)___ (___(b)___) and ___(c)___ (___(d)____)

Answer 44

a. increase liability
b. accounts payable
c. decrease equity
d. utility expense