Accounting Test

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Top of Form 1 . Equipment with an estimated market value of 45 ,000 is offered for sale at 65 ,000 . The equipment is acquired for 10 ,000 in cash and a note payable of 40 ,000 due in 30 days . The amount used in the buyer 's accounting records to record this acquisition is ________ (Points : 4 50 ,000 65 ,000 10 ,000 45 ,000

2 . The assets and liabilities of the company are 155 ,000

and 60 ,000 respectfully . Owner 's equity should equal ________ (Points : 4 215 ,000 155 ,000 60 ,000 95 ,000

3 . If owner 's equity increased by 30 ,000 during the same period , the amount and direction (increase or decrease ) of the period 's change in assets is ________ (Points : 4 65 ,000 increase 5 ,000 decrease 5 ,000 increase 65 ,000 decrease

4 . A business paid 9 ,000 to a creditor in payment of an amount owed The effect of the transaction on the accounting equation was to ________ (Points : 4

increase one asset , decrease another asset

increase an asset , increase a liability

decrease an asset , decrease a liability

increase an asset , increase owner 's equity

5 . If owner 's equity increased by 24 ,000 during the same period , then the amount and direction (increase or decrease ) of the period 's change in

6 . The Kennedy Company sold land for 60 ,000 in cash . The land was originally purchased for 40 ,000 , and at the time of the sale 15 ,000 was still owed to First National Bank on that purchase . After the sale The Kennedy Company paid off the loan to First National Bank . What is the effect of the sale and the payoff of the loan on the accounting equation (Points : 4

assets increase 20 ,000 liabilities decrease 15 ,000 owner 's equity increases 5 ,000

assets increase 5 ,000 liabilities decrease 15 ,000 owner 's equity increases 20 ,000

assets increase 60 ,000 liabilities decrease 15 ,000 owner 's equity increases 20 ,000

assets increase 20 ,000 liabilities decrease 15 ,000 owner 's equity increases 35 ,000

7 . Rivers Computer Makeover Company purchased 15 ,000 of Computer and Office Equipment . The company paid 3 ,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in six monthly installments . How will this transaction affect the accounting equation (Points : 4

Increase Assets (Computer and Office Equipment 15 ,000 ) and decrease Liabilities (Accounts Payable 15 ,000

Increase Office Equipment 15 ,000 and decrease Cash 3 ,000 ) and increase Liabilities (Notes Payable 12 ,000

Increase Office Equipment 12 ,000 and increase Cash 3 ,000 ) and decrease Liabilities (Accounts Payable 15 ,000

Increase Assets (Computer and Office Equipment 12 ,000 ) and increase Liabilities (Accounts Payable 12 ,000

8 . The asset section of the Balance Sheet normally presents assets in ________ (Points : 4

alphabetical

of largest to smallest dollar...