MULTIPLE CHOICE
MULTIPLE CHOICE
1. The owner's equity in a business amounted to $56,000 at the beginning of the year and $100,000 at the end of the year. The owner had made no additional investments and had withdrawn $19,000 during the year. The net income for the year amounted to
a.
$76,000.
b.
$67,000.
c.
$63,000.
d.
$188,000.
ANS: C DIF: Medium OBJ: LO 6-1 MSC: AACSB Analytic
4. Changes in owner's equity that result from investments or withdrawals of assets by the owner are included in the
a.
statement of owner's equity.
b.
income statement.
c.
balance sheet.
d.
chart of accounts.
ANS: A DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication
5. Owner's equity can be increased through
a.
withdrawals by the owner.
b.
investments by the owner.
c.
expenses exceeding revenues.
d.
purchases of assets for cash.
ANS: B DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication
6. The balance in an expense account is closed to a(n)
a.
capital account.
b.
revenue account.
c.
drawing account.
d.
income summary account.
ANS: D DIF: Easy OBJ: LO 6-2 MSC: AACSB Communication
7. The order in which financial statements should be prepared is
a.
balance sheet, income statement, statement of owner's equity.
b.
income statement, balance sheet, statement of owner's equity.
c.
statement of owner's equity, balance sheet, income statement.
d.
income statement, statement of owner's equity, balance sheet.
ANS: D DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication
8. After the closing entries are journalized and posted, which of the following accounts would NOT have a balance?
a.
Cash
b.
Office Equipment
c.
Notes Payable
d.
Delivery Fees
ANS: D DIF: Easy OBJ: LO 6-2 MSC: AACSB Communication
9. A form of balance sheet that lists the liabilities and the owner's equity sections below the assets section is called the
a.
account form.
b.
journal form.
c.
report form.
d.
current form.
ANS: C DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication
10. After the closing entries have been posted, which of the
1. The owner's equity in a business amounted to $56,000 at the beginning of the year and $100,000 at the end of the year. The owner had made no additional investments and had withdrawn $19,000 during the year. The net income for the year amounted to
a.
$76,000.
b.
$67,000.
c.
$63,000.
d.
$188,000.
ANS: C DIF: Medium OBJ: LO 6-1 MSC: AACSB Analytic
4. Changes in owner's equity that result from investments or withdrawals of assets by the owner are included in the
a.
statement of owner's equity.
b.
income statement.
c.
balance sheet.
d.
chart of accounts.
ANS: A DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication
5. Owner's equity can be increased through
a.
withdrawals by the owner.
b.
investments by the owner.
c.
expenses exceeding revenues.
d.
purchases of assets for cash.
ANS: B DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication
6. The balance in an expense account is closed to a(n)
a.
capital account.
b.
revenue account.
c.
drawing account.
d.
income summary account.
ANS: D DIF: Easy OBJ: LO 6-2 MSC: AACSB Communication
7. The order in which financial statements should be prepared is
a.
balance sheet, income statement, statement of owner's equity.
b.
income statement, balance sheet, statement of owner's equity.
c.
statement of owner's equity, balance sheet, income statement.
d.
income statement, statement of owner's equity, balance sheet.
ANS: D DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication
8. After the closing entries are journalized and posted, which of the following accounts would NOT have a balance?
a.
Cash
b.
Office Equipment
c.
Notes Payable
d.
Delivery Fees
ANS: D DIF: Easy OBJ: LO 6-2 MSC: AACSB Communication
9. A form of balance sheet that lists the liabilities and the owner's equity sections below the assets section is called the
a.
account form.
b.
journal form.
c.
report form.
d.
current form.
ANS: C DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication
10. After the closing entries have been posted, which of the