question

T/F: The basic elements of a financial accounting system include a framework for preparing financial statements

answer

true

question

T/F: The accounting equation is Assets = Liabilities + Stockholder's Equity

answer

true

question

T/F: Any given transaction must affect at least 2 different parts of the accounting equation

answer

false

question

T/F: Dividends are an example of an expense

answer

false

question

T/F: Retained earnings will be increased by the amount in the dividend account

answer

false

question

By keeping a running total of the effects of transactions, the accounting equation provides a framework for summarizing the effects of a series of transactions

answer

true

question

T/F: A business receives $10,000 cash for a sale of merchandise and records this receipt of cash as an increase in accounts receivable by mistake. The accounting equation is still in balance

answer

true

question

The effect of every transaction is an increase or decrease in 1 or more of the accounting equation elements

answer

true

question

T/F: The accounting equation can be expressed: Assets-Liabilities=Revenues

answer

false

question

T/F: When an accounts payable is paid in cash, the stockholder's equity in the business increases

answer

false

question

T/F: A transaction can affect at most 2 elements of the accounting equation

answer

false

question

T/F: When an account receivable is collected in cash, the total assets of the business increase

answer

false

question

T/F: Equality of the accounting equation means no errors have occured

answer

false

question

T/F: It is possible for a transaction to change the makeup of assets, but to NOT affect assets in total

answer

true

question

T/F: When capital stock is issued by a corporation for cash, both the income statement and the balance sheet are affected

answer

false

question

T/F: Fees earned and received in cash will increase operating activity cash flows as well as retained earnings

answer

true

question

T/F: Miscellaneous expenses are expenses that have an undetermined amount to be paid

answer

false

question

T/F: The payment of utilities expense in cash would affect the operating activities in the statement of cash flows and the income statement but NOT the balance sheet

answer

false

question

T/F: Revenues decrease stockholder's equity

answer

false

question

T/F: The two sides of the accounting equation don't have to be equal

answer

false

question

The basic financial statements do not include

answer

tax return

question

Which of the following is NOT an element of the financial accounting system

answer

a set of rules for the stock exchange

question

If a $15,000 purchase of equipment for cash is incorrectly recorded as an increase to equipment and as an increase to cash, at the end of the period assets will

answer

exceed liabilities and stockholders equity by $30,000

question

Which of the following is NOT considered to be a liability

answer

Accounts receivable

question

Which of the following is not true about liabilities?

answer

Liabilities do not include wages owed to employees of the company

question

Which of the following accounts is a stockholder's equity account?

answer

capital stock

question

Which of the following group of accounts are all assets?

answer

prepaid expenses, buildings, patents

question

Which of the following situations increase stockholder's equity

answer

Services are provided on account

question

Stockholder's Equity will b reduced by all of the following except

answer

revenues

question

The gross increases in stockholder's equity attributable to business activities are called

answer

revenues

question

The payment of $15,000 for expenses was recorded by Spears Co. as an increase in cash of $15,000 and a decrease in retained earnings of $15,000. What is the effect of this error on the accounting equation

answer

Total assets will exceed total liabilities and stockholder's equity by $30,000

question

Which of the following will increase stockholder's equity

answer

Owner investment

question

A ____ is an economic event that under generally accepted accounting principles affects an element of the financial statements and must be recorded

answer

transaction

question

The statement of cash flows is integrated with the balance sheet because

answer

the cash at the beginning of the period + or - the cash flows from the operating, investing, and financing activities equals the end of period cash reported on the balance sheet

question

effect on S/E after borrowing money from bank?

answer

no effect

question

effect on S/E by paying creditors?

answer

no effect

question

effect on S/E by purchasing store equipment

answer

no effect

question

effect on S/E by paying dividends

answer

decrease

question

Declaring and paying cash dividends affects which accounts?

answer

cash and retained earnings

question

Buying equipment for cash affects which accounts?

answer

cash and equipment

question

Receiving cash for fees earned affects which financial statement elements?

answer

assets and stockholder's equity

question

Paying expenses affects which financial statement element?

answer

assets and stockholder's equity

question

The payment of a liability

answer

decreases assets and decreases liabilities

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