Q: Which of the following is the correct formula for calculating total assets from a balance sheet?

$$\text{Total Assets} = \text{Cash} + \text{Accounts Receivable} + \text{Supplies} + \text{Equipment}$$

Question 1

Which of the following best describes the purpose of a trial balance in financial accounting?

Accepted Answer

To ensure that total debits equal total credits before preparing financial statements.

Question 2

Given the following accounts: Cash, Accounts Receivable, Supplies, Furniture, Land, which of these are classified as assets on the balance sheet?

Accepted Answer

Cash, Accounts Receivable, Supplies, Furniture, Land

Question 3

If a company has total assets of $$54,000 and total liabilities of 17$$,000, what is the owner's equity? Use the accounting equation $$	ext{Assets} = 	ext{Liabilities} + 	ext{Owner's Equity}.$$

Accepted Answer

$$\37$$,000$

Question 4

Which of the following journal entries correctly records the purchase of supplies for cash?

Accepted Answer

Debit Supplies, Credit Cash

Question 5

A business earned $$25,000 in service revenue and incurred expenses of 13$$,300. What is the net income? Use the formula $$	ext{Net Income} = 	ext{Revenue} - 	ext{Expenses}.$$

Accepted Answer

$$\11$$,700$

Question 6

Which account type is increased by credits and decreased by debits?

Accepted Answer

Liabilities

Question 7

If the beginning capital is $$42,000, net income is 11$$,800, and withdrawals are $$6,000, what is the ending capital? Use the formula $$	ext{Ending Capital} = 	ext{Beginning Capital} + 	ext{Net Income} - 	ext{Withdrawals}$.

Accepted Answer

$$\47$$,800$

Question 8

Which of the following transactions would increase both assets and owner's equity?

Accepted Answer

Owner invests cash into the business.

Question 9

A company receives $1,800 cash for service revenue. What is the correct journal entry?

Accepted Answer

Debit Cash $$1,800; Credit Service Revenue 1$$,800

Question 10

If the trial balance does not balance, which of the following is the most likely cause?

Accepted Answer

A transaction was recorded only on one side (debit or credit).

Question 11

Which of the following is NOT an expense account?

Accepted Answer

Accounts Payable

Question 12

What is the effect on the accounting equation when a company pays $1,100 cash for salaries expense?

Accepted Answer

Assets decrease, owner's equity decreases

Question 13

Which of the following accounts would appear on the income statement?

Accepted Answer

Service Revenue

Question 14

If a company purchases furniture for $2,400 on account, what is the effect on the accounts?

Accepted Answer

Increase Furniture (asset), increase Accounts Payable (liability)

Question 15

Which of the following best describes the double-entry system in accounting?

Accepted Answer

Every transaction affects at least two accounts, with equal debits and credits.

Question 16

A business owner withdraws $2,200 cash for personal use. What is the correct journal entry?

Accepted Answer

Debit Owner's Drawings $$2,200; Credit Cash 2$$,200

Question 17

Which of the following is the correct formula for calculating total assets from a balance sheet?

Accepted Answer

$$	ext{Total Assets} = 	ext{Cash} + 	ext{Accounts Receivable} + 	ext{Supplies} + 	ext{Equipment}$$

Question 18

If the debit column in a trial balance totals $$137,600 and the credit column totals 137$$,600, what does this indicate?

Accepted Answer

The ledger is in balance and ready for financial statement preparation.

Question 19

Which of the following transactions would NOT affect the owner's equity?

Accepted Answer

Purchase of supplies for cash

Question 20

A company has the following balances: Cash $$8,300, Accounts Receivable 800$$, Supplies $$500, Furniture 2$$,400, Land $$22,000. What is the total assets? Use the formula $$	ext{Total Assets} = 	ext{Cash} + 	ext{Accounts Receivable} + 	ext{Supplies} + 	ext{Furniture} + 	ext{Land}$.

Accepted Answer

$$\34$$,000$

Fundamental Financial Accounting: Transactions, Statements, and the Accounting Cycle

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