D) Assets would increase $700 and equity would increase $700.
E) Liabilities would decrease $700 and equity would increase $700.
186) All of the following are classified as assets except:
A) Accounts Receivable.
B) Supplies.
C) Equipment.
D) Accounts Payable.
E) Land.
187) Which of the following accounts is not included in the calculation of a company's ending owner's equity?
A) Revenues.
B) Expenses.
C) Withdrawals.
D) Owner investments.
E) Cash.
188) All of the following are classified as liabilities except:
A) Accounts Receivable.
B) Notes Payable.
C) Wages Payable.
D) Accounts Payable.
E) Taxes Payable.
189) Billington Corp borrows $80,000 cash from Second National Bank. How does this transaction affect the accounting equation for Billington?
A) Assets would decrease $80,000 and liabilities would decrease $80,000.
B) Assets would decrease $80,000 and equity would increase $80,000.
C) Assets would increase $80,000 and equity would decrease $80,000.
D) Assets would increase $80,000 and liabilities would increase $80,000.
E) Liabilities would decrease $80,000 and equity would increase $80,000.
190) If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:
A) An increase of $80,000.
B) A decrease of $80,000.
C) An increase of $30,000.
D) A decrease of $30,000.
E) An increase of $25,000.
191) All of the following are classified as assets except:
A) Accounts Payable.
B) Accounts Receivable.
C) Cash.
D) Supplies.
E) Prepaid Insurance.
192) Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?
A) Assets would decrease $2,000 and liabilities would decrease $2,000.
B) Assets would decrease $2,000 and equity would decrease $2,000.
C) Assets would increase $2,000 and equity would increase $2,000.
D) Assets would increase $2,000 and liabilities would increase $2,000.
E) Liabilities would decrease $2,000 and equity would increase $2,000.
193) Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?
A) Assets would decrease $1,750 and liabilities would decrease $1,750.
B) One asset would increase $1,750 and a different asset would decrease $1,750, causing no net change in the accounting equation.
C) Assets would increase $1,750 and equity would increase $1,750.
D) Assets would increase $1,750 and liabilities would increase $1,750.
E) Liabilities would decrease $1,750 and equity would increase $1,750.
194) The accounting equation for Ying Company shows a decrease in its assets and a decrease in its equity. Which of the following transactions could have caused that effect?
A) Cash was received from providing services to a customer.
B) The company paid an amount due on credit.
C) Equipment was purchased for cash.
D) A utility bill was received for the current month, to be paid in the following month.
E) Advertising expense for the month was paid in cash.
195) The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities. Which of the following transactions could have caused that effect?
A) Cash was received from providing services to a customer.
B) Cash was received as an owner investment.
C) Equipment was purchased on credit.
D) Supplies were purchased for cash.
E) Advertising expense for the month was paid in cash.
196) The expense recognition principle, also called the matching principle:
A) Prescribes that accounting information is based on actual cost.
B) Provides guidance on when a company must recognize revenue.
C) Prescribes that a company report the details behind financial statements that would impact users' decisions.
D) Prescribes that a company record the expenses it incurred to generate the revenue reported.
E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
197) The measurement principle, also called the cost principle:
A) Prescribes that accounting information is based on actual cost.
B) Provides guidance on when a company must recognize revenue.
C) Prescribes that a company report the details behind financial statements that would impact users' decisions.