20170217 APA2111 MT StudyGuide.docx

20170217 APA2111 MT StudyGuide.docx - APA 2111 Midterm...

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APA 2111 Midterm Study Guide This study guide will help you to prepare for the multiple choice format of the midterm. You have already covered the concepts in your chapter readings and through MAL. The answers to the questions are at the endof the document so you can check your work. Work as many as you can and determine the areas you need to review. It easy to study what you already know, but you’ll see improvements in your scores by filling in the gaps and learnin As a reminder, this course has a midterm and a cumulative final. Be sure to ask your instructor if you have questio or need additional explanations. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The purpose of the accounting process is to provide financial information about: 1) _______ A) sole proprietorships. B) large corporations. C) small businesses. D) All of these answers are correct. 2) Which of the following will decrease owner's equity? 2) _______ A) An investment by the owner B) A withdrawal by the owner C) An exchange of assets D) The purchase of an asset on credit 3) If Ol' Fashioned Toys' revenues are less than its expenses during the accounting period: 3) _______ A) owner's withdrawals increase owner's equity. B) the business will incur a net loss. C) net income causes liabilities to decrease. D) owner's withdrawals increase net income. 4) The purchase of supplies for cash would affect which account category? 4) _______ A) Expense B) Capital C) Assets D) Liabilities 5) Items owned by the business such as land, supplies and equipment are: 5) _______ A) assets. B) owner's equity. C) expense. D) liabilities. 6) Which of the following is NOT an asset? 6) _______ A) Accounts Payable B) Buildings C) Cash D) Accounts Receivable 7) If total liabilities increased by $2,000 and the assets increased by $2,000 during the accounting period, what is the change in the owner's equity amount? 7) _______ A) Decrease of $8,000 B) Decrease of $4,000 C) No effect on owner's equity D) Increase of $8,000 8) The claims of creditors against the assets are: 8) _______ A) owner's equity. B) liabilities. C) revenues. D) expenses. 9) Assets are equal to: 9) _______ A) liabilities - revenues. B) liabilities - owner's equity. C) revenues + liabilities. D) liabilities + owner's equity. 10) The basic accounting equation is: 10) ______ A) Assets = Owner's Equity - Liabilities. B) Assets = Revenues - Expenses. C) Assets = Liabilities - Owner's Equity. D) Assets = Liabilities + Owner's Equity.
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11) If total liabilities are $20,000 and owner's equity is $32,000, the total assets must be: 11) ______ A) $15,000. B) $52,000. C) $12,000. D) $8,000. 12) If total liabilities are $2,000 and total assets are $10,000, owner's equity must be: 12) ______ A) $8,000. B) $6,000. C) $12,000. D) $10,000.
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