Fill in the blank to complete the statement.

1. Assets = _______________________ + _________________________.

2. A summary of assets, liabilities, and owner's equity as of a particular date is reported on a statement called the ___________________________ _____________________________.

3. Revenue earned from a sale on account creates an asset called __________________ __________________.

4. An outward or potential outward flow of assets usually causes ______________________.

5. A report that shows how well a business has performed over a period of time is called the ___________________________ ____________________________.

6. Personal expenses unrelated to the business are ____________________________.

Part B Answer true or false to the following statements.

1. Assets plus liabilities equal owner's equity.

2. Capital equal cash.

3. Revenue is a liability.

4. The balance sheet lists assets, owner's equity, and liabilities.

5. Revenue is a subdivision of owner's equity.

6. "Withdrawals" is one subdivision of liabilities.

7. Expenses are listed on the balance sheet.

8. Withdrawals and expenses are both listed on the income statement.

9. Revenue is shown on the income statement.

10. "Withdrawals" is listed on the statement of owner's equity.

Classify each of the following items as an Asset, Liabilities or part of Owner's Equity.

1. Supplies ____________
2. Salaries Payable ____________
3. Kyle E, Capital ____________
4. Cash ____________
5. Accounts Receivables ____________
6. Loans Payable ____________
7. Rent Expense ____________
8. Cleaning Fees Earned ____________
9. Samsung Tablet ____________
10. Prepaid Rent ____________

Multiple Choice:

1. Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as

a. Asset

b. Liabilities

c. Owner's Equity

2. Obligations that come due in the future and results in increasing the financial rights or claims of creditors to assets?

a. Liabilities

b. Accounts Receivables

3. What is the amount earned by performing services for customers or selling goods to customers?

a. Capital

b. Revenue

4. The financial statement that has both same ending balance is called

1. Income Statement
2. Statement of Owner's Equity
3. Balance Sheet

5. Collected $200 for system upgrade labor charge from a customer. What effect will this have?

a. Increase an asset and increase a liability.

b. Decrease an asset and increase a liability.

c. Increase an asset and increase owner's equity.

d. Increase an asset and decrease owner's equity.

6. Set up a new account with Staples and purchased $250 in office supplies on credit. What effect will this have?

a. Increase an asset and increase a liability.

b. Decrease an asset and increase a liability.

c. Increase an asset and increase owner's equity.

d. Increase an asset and decrease owner's equity.

7. Kael invested cash in her new business. What effect will this have?

a. Increase an asset and increase a liability.

b. Decrease an asset and increase a liability.

c. Increase an asset and increase owner's equity.

d. Increase an asset and decrease owner's equity.

8. Revenue, expenses, and withdrawals are subdivisions of

a. Asset

b. Liabilities

c. Owner's Equity

d. All of the above

9. An expense should be recorded when

a. The bill is paid

b. The expense is incurred

c. A bill is received in the mail

d. None of the above are correct

10. If total liabilities increased by $16,000 and the assets increased by $20,000 during the accounting period, what is the change in the owner's equity amount?

a. Increase of $4,000

b. Decrease of $4,000

c. Increase of $20,000

d. Decrease of $16,000

Complete the following table:

Asset = Liabilities + Owner's Equity

1. $ 26,250 = _______ + $ 8,550
2. _______ = $ 5,103 + $ 6,230
3. $ 23,000 = $ 9,650 + ________

Record the following transactions in the basic accounting equation:

a. Kyle invests $25,000 cash to begin a financial planning service.

b. The company buys office furniture for cash, $1,200.

c. The company buys additional office furniture on account, $600.

d. The company makes a payment on the office furniture, $400.

	KYLE'S FINANCIAL PLANNING
ASSETS	=	LIABILITIES	OWNER'S EQUITY
CASH	EQUIPMENT		A/P	CAPITAL
TOTAL

Princess's Interior Design completes the following transactions:

a. Princess invests $5,000 cash in her company.

b. The company purchases equipment on account, $250.

c. The company purchases additional equipment for cash, $100.

d. The company makes a payment on account for the equipment, $150.

Required: Record the above transactions in the basic accounting equation.

	PRINCESS INTERIOR DESIGN
ASSETS	=	LIABILITIES	OWNER'S EQUITY
CASH	EQUIPMENT		A/P	CAPITAL

Record the following transactions into the expanded accounting equation for the MYK's Accounting Firm. Note that all titles have beginning balances. (You will need to determine the beginning capital balance.)

A) Provided accounting services for cash, $2,400

B) Billed customers for services rendered, $4,800

C) Received and paid the monthly utility bill, $600

D) Collected $1,200 on account from customers

E) Paid supplies expense, $500

F) Withdrew $600 cash for personal use

MYK'S ACCOUNTANT

ASSETS	=	LIABILITIES	OWNER'S EQUITY
CASH	A/R		A/P	CAPITAL	WITHDRAWAL	REVENUE	EXPENSES
1800	200		600

Use the following information to prepare:

a. an income statement,

b. a statement of owner's equity, and

c. a balance sheet for the month ended March 31, 2020 for Bolthouse Company.

J. Bolthouse, Capital (beg.) $2,000

Revenue 900

Expenses 600

Withdrawals 150

Cash 3,000

Equipment 1,000

Accounts Receivable 150

Accounts Payable 2,000

J. BOLTHOUSE CO.

INCOME STATEMENT

FOR THE MONTH ENDED MARCH 31, 2020

Revenue
Expenses
Net Income

J. BOLTHOUSE CO.
STATEMENT OF OWNER'S EQUITY
FOR THE MONTH ENDED MARCH 31, 2020
J. Bolthouse, Capital (beg.)
Net Income
Withdrawals
Increase in Capital
J. Bolthouse, Capital

J. BOLTHOUSE CO.
BALANCE SHEET
MARCH 31, 2020
ASSETS	LIABILITIES AND OWNER'S EQUITY
Cash		Accounts Payable
A/R
Equipment		J. Bolthouse, Capital
Total Assets		Total Liabilities &
		Owner's Equity