©Cambridge Business Publishers, 2014Quiz Solutions 2-1Financial Accounting for Undergraduates, 2ndEditionFinancial Accounting for Undergraduates, 2ndEdition by Ferris, Wallace andChristensenPractice Quiz SolutionsChapter 2.Processing Accounting Information1.In the accounting cycle, preparing financial statements comes before which ofthe following steps?a.Analyzing transactionsb.Recording transactionsc.Preparing an unadjusted trial balanced.Prepare a post-closing trial balanceAnswer:d2.The Schultz Corporation purchased equipment costing $5,000 by taking out abank loan. What would be the effect on the accounting equation?AssetsLiabilitiesShareholders' Equitya.Increase $5,000Decrease $5,000No Effectb.Increase $5,000Increase $5,000No Effectc.Decrease $5,000Decrease $5,000No Effectd.Decrease $5,000Increase $5,000No EffectAnswer:b
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