Self Assessment Quizzes

CHAPTER 3: Section 2 Transactions That Affect Owner’s Investment, Cash, and Credit

	1.	The purchase of a desk on account will increase Office Furniture and will also increase

		a.	Cash in Bank
		b.	Accounts Payable
		c.	Accounts Receivable
		d.	Owner`s Capital

	2.	An economic event that causes an increase or decrease in assets, liabilities, or owner`s equity is called

		a.	accounts receivable
		b.	an account
		c.	a business transaction
		d.	accounts payable

	3.	Accounts Receivable is

		a.	a liability account
		b.	an equity account
		c.	an asset account
		d.	none of the above

	4.	If an owner deposits $30,000 in the business checking account, the two accounts affected are

		a.	Accounts Payable and Money I Owe My Mother-in-Law
		b.	Cash in Bank and Owner`s Capital
		c.	Cash in Bank and Accounts Payable
		d.	Accounts Receivable and Accounts Payable

	5.	When a business buys an item on credit, it is buying

		a.	on sale
		b.	on account
		c.	on-line
		d.	on the cusp

	6.	If a business purchased a new computer system for cash the account debited would be

		a.	Accounts Receivable
		b.	Computer Software
		c.	Computer Equipment
		d.	Cash

	7.	If the owner of a business transferred a telephone from her home to the business, the account credited would be

		a.	Owner`s Capital
		b.	Office Equipment
		c.	Cash
		d.	the Phone Company

	8.	Accounts Payable is

		a.	an asset account
		b.	an equipment account
		c.	an owner`s equity account
		d.	a liability account