ACC A01V EXAM 1 ANSWERS ATTEMPT 1 ASHWORTH, 2025/2026.

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A01V Introduction to Accounting Exam 1 Answers Attempt 1 (Ashworth) Lesson 1 Question 1 5 / 5 points Katie's Vegetarian Restaurant, with total assets of $90,000, borrows $15,000 ... from the bank. Which of the following is a true statement upon borrowing the money? Question options: Total assets are now $105,000. Total assets are now $80,000. Total assets are now $15,000. Total assets are now $75,000. Question 2 5 / 5 points Logan's Motor Sports buys $30,000 of equipment on credit. Which of the following is a true statement? Question options: Total assets increase. Total assets are unchanged. Total liabilities decrease. Total liabilities are unchanged. Question 3 5 / 5 points The balance sheet contains __________. Question options: liabilities, expenses and capital assets, liabilities and revenues expenses, assets and cash assets, liabilities and owner's equity Question 4 5 / 5 points Bonnie's Baskets purchases $4,000 worth of office equipment on account. This causes Question options: Cash and Capital to decrease. Office Equipment and Accounts Payable to increase. Office Equipment to decrease and Accounts Payable to increase. Accounts Payable to increase and Capital to decrease. Question 5 5 / 5 points Mary invested cash in her new business. What effect will this have? Question options: increase an asset and increase a liability decrease an asset and increase a liability increase an asset and increase owner's equity increase an asset and decrease owner's equity Question 6 5 / 5 points Which of the following would result if a business purchased Equipment paying a 40% down payment in cash? Question options: Equipment would increase and Cash would decrease. Accounts Payable would increase. Since the equipment has not been paid in full, there is nothing to record. Both A and B are correct. Question 7 5 / 5 points If total assets are $30,000 and total liabilities are $18,000, Capital must equal __________. Question options: $12,000 $28,000 $8,000 $20,000 Question 8 5 / 5 points If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in the owner's equity amount? Question options: increase of $2,000 decrease of $2,000 increase of $10,000 decrease of $10,000 Question 9 5 / 5 points A partnership is a business that is __________. Question options: easy to form ends with the death of a partner owned by more than one person All of these answers are correct. Question 10 0 / 5 points Which is an advantage of a sole proprietorship form of business?   Question options: There is limited personal risk. The business can continue indefinitely. The owner makes all the decisions. All of these answers are correct. Question 11 5 / 5 points A legal firm would be considered a __________. Question options: merchandise company manufacturer service company None of the above answers are correct. Question 12 5 / 5 points A purchase of a vehicle for cash would have what effect on the accounting equation? Question options: Total asset amount remains the same. Total liabilities are overstated. Total owner's equity is overstated. Both A and B are correct. Question 13 5 / 5 points If total liabilities are $18,000 and owner's equity is $21,000, the total assets must be __________. Question options: $39,000 $5,000 $20,000 $17,000 Question 14 5 / 5 points The purpose of the accounting process is to provide financial information about __________. Question options: sole proprietorships small businesses large corporations All of these answers are correct. Question 15 5 / 5 points Which of the following will be recorded in the owner's equity column as an increase? Question options: an exchange of assets the purchase of an asset on credit an investment by the owner a withdrawal by the owner Question 16 5 / 5 points If total liabilities are $1,000 and total assets are $8,000, owner's equity must be __________. Question options: $7,000 $3,000 $10,000 $13,000 Question 17 5 / 5 points The Sarbanes-Oxley Act was passed to __________. Question options: prevent fraud at public companies replace all of the old accounting procedures with new ones improve the accuracy of the company's financial reporting Both A and C are correct. Question 18 5 / 5 points Strum Hardware has total assets of $50,000. What are the total assets if new equipment is purchased for $10,000 cash? Question options: $45,000 $50,000 $55,000 $60,000 Question 19 5 / 5 points Which of the following transactions would cause one asset to increase and another asset to decrease? Question options: The owner invested cash in the business. The business paid a creditor. The business incurred an expense on credit. The business bought supplies for cash. Question 20 5 / 5 points Which of the following is a characteristic of a sole proprietorship? Question options: business owned by more than one person easy to form each stockholder acts as an owner of the company can continue indefinitely [Show More]

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