APA1111

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1

Wally's Window Washing Co. owed an outstanding balance to Industrial Supplies Co. for supplies purchased the month before. On June 30, Wally issued a check to Industrial Supplies for $550 to pay the balance in full. Wally's payment on June 30 would decrease cash and decrease ___________.

accounts payable.

2

Accounts payable represents amounts a business must pay in the future. Accounts payable is known as a(n) _____________.

liability.

3

A company's balance sheet lists the following categories:

liabilities

owner's equity

assets

4

Hernandez Consulting issued a check for $390 to pay the utilities bill. This transaction would have which of the following effects on the accounting equation:

increase in utilities expense

decrease in cash

5

The financial statement that reports a business's financial condition on a certain date, including its assets, liabilities, and owner's equity is called a(n):

balance sheet.

6

Financial statements must be prepared in a specific order so that information from the preceding financial statement may be placed into the next financial statement. Organize the following statements into the correct order of preparation:

1. Income

2. Statement of Owner's Equity

3. Balance Sheet

7

The income statement shows the results of business operations for a specific period of time. When expenses are greater than revenue, this is called ________ _________

net loss.

8

On a company's income statement, when revenue and expenses are equal, this is known as _________.

break even.

9

Place the following headings of an income statement in proper order:

Mendez Bookkeeping Services Co.

Income Statement

Month Ended August 31, 20XX

10

Single and double lines have significant meanings on financial statements. Identify which of the following statements are accurate:

single lines can show the amounts above it are being added

11

True or false: Dollar signs are used on income statements that are prepared on plain paper, that is, not on ruled form.

True

12

Petra invested an additional $2000 in Petra Associates during the month of June. This transaction would appear as:

an increase in the statement of owner's equity.

13

Charlie started Auto Repair Company and contributed an automotive lift and other equipment he personally owned to the company. This equipment would be recorded at the current worth, called ____________.

fair market value.

14

Chanda Mosson invested an additional $5,000 in Mosson Home Repairs Co. during the month of December. This transaction would affect which financial statement?

Statement of Owner's Equity

15

Thompson Associates purchased office supplies on account from Owen Supplies, Inc. Owen Supplies, Inc. would be known as a(n) _____________.

creditor.

16

Examples of business transactions include:

Purchases

Payments

17

The first step in analyzing a business transaction is to describe the financial event. Place the following financial event analysis steps in the correct order.

1. Identify the property.

2. Identify who owns the property.

3. Determine the amount of increase or decrease.

18

Sana Gill deposited $3500 into a new business checking account to begin her new bookkeeping firm, Gill Bookkeeping. This business transaction would (increase/decrease) the company's cash, and (increase/decrease) Sana Gill, Capital.

Increase

Increase

19

An owner's financial interest in the business is called equity, or ___________.

capital.

20

Wendy's Window Cleaning bills customers for cleaning services. The customers have 30 days to pay the balance in full. Wendy provides services to a customer and sends a bill for $450. This transaction affects which part of the accounting equation?

Increases accounts receivable

Increases cleaning revenue

21

Sana Bookkeeping received $1,400 cash from clients who owed money for services previously billed. The effect of this transaction would increase cash and:

decrease accounts receivable.

22

On Friday, Betty's Grooming paid its employees a total of $2,000. This transaction would have which of the following effects on the accounting equation:

Increase wages expense

Decrease

23

Sanchez Painting Co. hired two employees during the month of March. At the end of the month, Sanchez paid the employees a total of $10,000. This transactions (increase/decrease) cash and (increase/decrease) wages expense.

Decrease

Increase

24

The statement of owner's equity reports the changes that occurred in the owner's financial interest during the reporting period. Place the following parts of the statement of owner's equity in the correct order that it would be reported:

Capital, January 1, 2016

Net Income

Withdrawals

Capital, January 31, 2016

25

Dora's Delivery Company has $12,000 of total assets and $4,000 of total owner's equity. Therefore, liabilities must equal $________.

$8000

26

Amounts earned from the sale of goods or services is called __________.

revenue.