Question : 111. The assets of a company total $700,000; the liabilities, $200,000. : 1256318

 

 

111. The assets of a company total $700,000; the liabilities, $200,000. What are the total claims of the owners? 

A. $900,000

B. $700,000

C. $500,000

D. $200,000

E. It is impossible to determine unless the amount of owners’ investment is known.

 

112. Our company has three times as many assets as it does liabilities. If total liabilities are $55,000, what is the amount of owners’ equity? 

A. $55,000

B. $110,000

C. $165,000

D. $220,000

E. Owners’ equity cannot be determined from the given information.

 

 

113. A company has twice as much owner’s equity as it does liabilities. If total liabilities are $50,000, what amount of assets are owned by the company? 

A. $50,000

B. $100,000

C. $150,000

D. $200,000

E. Assets cannot be determined from the given information.

 

 

114. Which of the following statements is true? 

A. Assets and revenues are the same thing.

B. If employees have not yet been paid for their work, the company has wages payable.

C. Retained earnings equal cash that the company has earned and kept

D. Revenue is another term for profit.

E. Revenue minus expense equals retained earnings.

 

 

 

115. Assets created by selling goods and services on credit are: 

A. Accounts payable

B. Accounts receivable

C. Liabilities

D. Expenses

E. Equity

 

 

116. An exchange of value between two entities is called: 

A. The accounting equation.

B. Recordkeeping or bookkeeping.

C. A business transaction.

D. An asset.

E. Net Income.

 

 

117. Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation? 

A. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase.

B. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.

C. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect.

D. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase.

E. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.

 

 

118. How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed? 

A. +$10,000 accounts receivable, -$10,000 accounts payable.

B. +$10,000 accounts receivable, +$10,000 accounts payable.

C. +$10,000 accounts receivable, +$10,000 cash.

D. +$10,000 accounts receivable, +$10,000 consulting revenue.

E. +$10,000 accounts receivable, -$10,000 consulting revenue.

 

 

119. Apatha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. The effects of this transaction include: 

A. Assets increase by $75,000 and expenses increase by $75,000.

B. Assets increase by $75,000 and expenses decrease by $75,000.

C. Liabilities increase by $75,000 and expenses decrease by $75,000.

D. Assets decrease by $75,000 and expenses decrease by $75,000.

E. Assets increase by $75,000 and liabilities increase by $75,000.

 

 

120. Viscount Company collected $42,000 cash on its accounts receivable. How does this transaction affect the company’s accounting equation? 

A. Assets decrease and equity increases

B. Both assets and liabilities decrease

C. Assets, liabilities, and equity are unchanged

D. Both assets and equity are unchanged and liabilities increase

E. Assets increase and equity decreases