Topic: 01-20 Previewing Financial Statements
65. Although, in a sole proprietorship, owner investments are not recorded as revenue, any withdrawals are recorded as expenses.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-22 Transaction Analysis
66. An owner's cash investment in a business creates an asset (cash), a liability (note payable), and equity (owner investments).
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
67. The first section of the income statement reports cash from operating activities.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
68. Individuals and organizations who own the right to receive payments from a business are called its debtors.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
69. A loss arises when revenues are higher than expenses.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
70. A characteristic of liabilities is their capacity to reduce future assets.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
71. Profit on the income statement results in an increase in equity on the balance sheet due to profitable operating activities over a period of time.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
72. The equity in a partnership belongs to one owner.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-04 Forms of Organization
73. Chuck Taylor invested $8,000 in cash in FastForward. This amount would be reported in the statement of cash flows under financing.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-21 The Accounting Equation
74. Chuck Taylor withdrew $6,000 in cash for his personal use from his business. This amount should be included as an expense on the income statement.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-23 Summary of Transactions
75. Equity is increased when cash is received from customers in payment of a previously recorded accounts receivable.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-20 Previewing Financial Statements
76. Transactions that impact only assets do not require the accounting equation to stay in balance.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-21 The Accounting Equation
77. The financing side of the accounting equation describes where the assets came from.