Business Transaction I Question Preview (ID: 27162)


FUHRMS - Determining Effects Of Transactions On The Accounting Equation. TEACHERS: click here for quick copy question ID numbers.

Marion Butler deposited $25,000 in the bank to open a checking account in the name of Butler Florist.
a) This will increase Owner's Equity.
b) This will increase Liabilities.
c) This will decrease Owner's Equity.
d) This will decrease Cash in Bank.

Marion Butler deposited $25,000 in the bank to open a checking account in the name of Butler Florist.
a) This will increase Cash in Bank.
b) This will decrease Assets.
c) This will increase Liabilities.
d) This will decrease Owner's Equity.

The owner invested a calculator worth $200.
a) This will increase Office Equipment.
b) This will increase Cash in Bank.
c) This will decrease Assets.
d) This will decrease Owner's Equity.

The owner invested a calculator worth $200.
a) This will increase Owner's Equity.
b) This will decrease Assets.
c) This will increase Accounts Receivable.
d) This will increase Cash in Bank.

An asset is something you own such as...
a) Accounts Receivable
b) Accounts Payable
c) Owner's Equity
d) Profit

To sell something to a customer 'on account' means...
a) The business is owed money and it is an Accounts Receivable.
b) The business is owed money and it is an Accounts Payable.
c) The business owes money and it is an Accounts Payable.
d) The business is owes money and it is an Accounts Receivable.

Butler Florist issued a check for $10,000 for delivery equipment.
a) This will increase Delivery Equipment.
b) This will increase Cash in Bank.
c) This will increase Office Equipment.
d) A check is not the same as cash so only equipment increases.

Butler Florist issued a check for $10,000 for delivery equipment.
a) The net effect on assets is zero.
b) This will increase Cash in Bank.
c) This will increase Office Equipment.
d) Liabilities will increase.

Butler Florist bought a copier on account for $2,400.
a) This will increase Office Equipment.
b) The net effect on assets is zero.
c) This decrease Cash in Bank.
d) This will increase Owner's Equity.

Butler Florist bought a copier on account for $2,400.
a) This will increase Accounts Payable..
b) This decrease Cash in Bank.
c) This will decrease Owner's Equity.
d) This will increase Accounts Receivable.

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