Name ANSWERS
QUIZ 1
Date_________________
COHORT ________________
Circle the letter of the best response.
1. The Accounting Equation is:
A. Assets + Liabilities = Owner’s Equity.
B. Assets = Liabilities – Owner’s Equity.
C. Assets = Liabilities + Owner’s Equity.
D. Assets = Liabilities x Owner’s Equity.
2. Which item is not an asset?
A. Cash
B. Accounts Payable
C. Accounts Receivable
D. Supplies
3. Given that total liabilities decreased by $75,000 and total owner’s equity increased by $90,000
during the same accounting period - what is the net effect on total assets during this period?
A. $15,000 increase
B. $15,000 decrease
C. $90,000 increase
D. $90,000 decrease
4. Which financial statement is the same as the accounting equation A=L+E?
A. Income Statement
B. Statement of Changes in Equity
C. Balance Sheet
D. Statement of Cash Flow
5. The Accrual Basis Assumption allows one to:
A. Recognise revenue when they are earned and not when cash is received.
B. Accrue expenses when they are incurred, despite cash not being paid yet.
C. do both A and B.
D. do none of the above.
6. Which financial statement reports on the revenues and expenses during a specified period of
time?
A. Income Statement
B. Statement of Changes in Equity
C. Balance Sheet
D. Statement of Cash Flows
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7. Listed below are the account balances of the Arthur Frank entity:
Accounts Payable
Cash
Share Capital
Dividends
Land
Miscellaneous Expense
Service Revenue
Equipment
Accounts Receivable
Office Supplies
Salaries Expense
75,000
100,000
500,000
50,000
60,000
3,000
250,000
40,000
125,000
13,000
110,000
Total Assets are:
A. $100,000.
B. $338,000. 100+60+40+125+13
C. $278,000.
D. $213,000.
8. Listed below are the account balances of the Arthur Frank entity:
Accounts Payable
Cash
Share Capital
Dividends
Land
Miscellaneous Expense
Service Revenue
Equipment
Accounts Receivable
Office Supplies
Salaries Expense
75,000
100,000
500,000
50,000
60,000
3,000
250,000
40,000
125,000
13,000
110,000
The Net Income is:
A. $137,000. 250-3-110
B. $250,000.
C. $363,000.
D. $150,000.
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