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1. Equipment is sold for cash in an amount equal to the cost of the equipment recorded on the books. How does this sale affect the accounting equation?
a One asset increases; one asset decreases.
b Assets increase; liabilities increase.
c Assets increase; liabilities decrease.
d Assets increase; owner's equity increases.

2. There are relatively few types of revenue. Which of the following in NOT a type of revenue?
a Common Stock
b Service
c Interest
d Sales

3. A business renders service to a client and sends out a sales invoice. The amount will be collected from the customer at a later time. Which of the following would be TRUE at the time when the invoice is sent out?
a Owner's equity will decrease.
b Total liabilities will increase.
c Total assets will decrease.
d Net income will increase.

4. Scott's Camera Shop started the year with total assets of $80,000 and total liabilities of $40,000. During the year, the business earned revenues of $120,000 and incurred expenses of $70,000. Scott made no capital contributions during the year, but did make withdrawals of $60,000.
What is the amount of Scott's net income for the year?
a $50,000
b $10,000
c $30,000
d $40,000

5. A chart of accounts is the book holding all of the company's accounts.
True
False

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The solution provides the correct answers for the accounting study questions listed. All questions are answered.

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Help with your homework study questions:

1. Equipment is sold for cash in an amount equal to the cost of the equipment recorded on the books. How does this sale affect the accounting equation?
a One asset increases; one asset decreases.
b Assets increase; liabilities increase.
c Assets increase; liabilities decrease.
d Assets increase; owner's equity increases. CORRECT

2. There are ...

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