Reference no: EM1316088
Multiple questions on accounting principles.
1. Gross increases in owner's equity that can be attributed to ongoing business activities are:
a. Expenses
b. Drawings
c. Revenues
d. Assets
2. Equipment is purchased with a cash down payment of $60,000 and a signed note for $100,000. The net effect of this transaction will be:
a. An increase in assets of $60,000
b. An increase in assets of $100,000
c. An increase in assets of $160,000
d. No increase in assets.
3. A note payable is given to settle an existing account payable. The result of this transaction on the accounting records is:
a. No change in assets, liabilities, or owners' equity
b. Total Assets are increased
c. Total Liabilities are increased
d. Total Owner's Equity is increased
4. Carter Cleaning completed the following transactions: Purchased $18,000 of Office Supplies for $8,000 cash and the remainder on credit. Purchased equipment for $7,950 on credit. As a result of these transactions, Carter's total assets will:
a. Increase by $25,950
b. Increase by $17,950
c. Increase by $10,050
d. Increase by $ 7,950
5. Ford Photo Supplies balances at the beginning of January were: Cash $25,000; Accounts Receivable $15,000; Inventory $30,000; Accounts Payable $18,000; Notes Payable $17,000; Owner's Capital $??. Ford completed the following transactions during January: Paid off the note payable of $17,000. Sold $36,525 of merchandise to customers on account. Cost of goods sold was $21,250. Paid accounts payable of $3,500. Collected $25,000 of the amounts due from customers. As a result of these transactions, liabilities and owners' equity at the end of January will total:
a. Liabilities: $35,000; Owner's Equity: $35,000
b. Liabilities: $31,500; Owner's Equity: $71,525
c. Liabilities: $14,500; Owner's Equity: $50,275
d. Liabilities: $18,000; Owner's Equity: $15,275
6. Ford Photo Supplies balances at the beginning of January were: Cash $25,000; Accounts Receivable $15,000; Inventory $30,000; Accounts Payable $18,000; Notes Payable $17,000; Owner's Capital $??. Ford completed the following transactions during January: Paid off the note payable of $17,000. Sold $36,525 of merchandise to customers on account. Cost of goods sold was $21,250. Paid accounts payable of $3,500. Collected $25,000 of the amounts due from customers. As a result of these transactions, asset balances at the end of January will total:
a. Cash: $ 4,500; Accts Rec.: $51,525; Inventory: $ 8,750
b. Cash: $ 8,000; Accts Rec.: $15,000; Inventory: $30,000
c. Cash: $ 4,500; Accts Rec.: $26,525; Inventory: $21,250
d. Cash: $29,500; Accts Rec.: $26,525; Inventory: $ 8,750
7. At the beginning of October, Nirvana Carting had total assets of $86,000. During October, Nirvana had the following transactions: Collected receivables of $17,400 from previous periods. Generated revenues of $50,000, of which 60 percent were cash. Incurred total expenses of $36,000, 40 percent of which were paid. After these transactions are recorded, Nirvana's total assets amount to:
a. $ 97,400
b. $121,600
c. $133,400
d. $139,000
8. At the beginning of October, Nirvana Carting had total assets of $86,000. During October, Nirvana had the following transactions: Collected the opening receivables balance of $17,400. Generated revenues of $50,000, of which 60 percent were cash. Incurred total expenses of $36,000, 40 percent of which were paid. Nirvana had no payables balance at the beginning of October. After these transactions are recorded, Nirvana's Accounts Receivable and Accounts Payable amount to:
a. Accounts Rec.: $ -0-; Accounts Pay.: $ -0-
b. Accounts Rec.: $ 17,400; Accounts Pay.: $14,400
c. Accounts Rec.: $ 20,000; Accounts Pay.: $21,600
d. Accounts Rec.: $ 37,400; Accounts Pay.: $30,000
9. At the beginning of October, Nirvana Carting had total owner's equity of $86,000. During October, Nirvana had the following transactions: Collected the opening receivables balance of $17,400. Generated revenues of $50,000, of which 60 percent were cash. Incurred total expenses of $36,000, 40 percent of which were paid. Nirvana had no payables balance at the beginning of October. After these transactions are recorded, Nirvana's Owner's Equity balance amounts to:
a. $ 14,000
b. $ 86,000
c. $ 135,000
d. $ 100,000
10. On May 1, Ace Cleaners had total assets of $438,500. During May, the company completed the following transactions: Kerry Ace, owner of the firm, donated equipment to Ace Cleaners. The equipment had a value of $3,350 at this time. Purchased a building for $39,000 and signed a note for the purchase. Purchased $750 of supplies on credit. After these transactions are recorded, total assets will have a balance of:
a. $481,600
b. $481,500
c. $480,850
d. $472,850