1. Accounting is an information system that:A. Identifies business activities.B. Records business activities.C. Communicates business activities.D. Helps people make better decisions.E. All of these.2. Creditors claims on the assets of a company are called:A. Net losses.B. Expenses.C. Revenues.D. Equity.E. Liabilities.3. The excess of expenses over revenues for a period is:A. Net assets.B. Equity.C. Net loss.D. Net income.E. A liability.4. On June 30 of the current year, the assets and liabilities of Phoenix Phildell are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owners equity as of July 1 of the current year?A. $8,300B. $13,050C. $20,500D. $31,1005. Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?A. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase.B. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.C. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect.D. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase.E. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.6. The financial statement that reports whether the business earned a profit and also lists the types and amounts of the revenues and expenses is called:A. A Balance Sheet.B. A Statement of Owners Equity.C. A Statement of Cash Flows.D. An Income Statement.E. A Statement of Financial Position.7. A balance sheet lists:A. The types and amounts of the revenues and expenses of a business.B. Only the information about what happened to equity during a time period.C. The types and amounts of assets, liabilities, and equity of a business as of a specific date.D. The inflows and outflows of cash during the period.E. The assets and liabilities of a company but not the owners equity.8. The financial statement that shows the beginning balance of owners equity; the changes in equity that resulted from new investments by the owner, net income (or net loss); withdrawals; and the ending balance, is the:A. Statement of Financial Position.B. Statement of Cash Flows.C. Balance Sheet.D. Income Statement.E. Statement of Owners Equity.9. Accounts payable appear on which of the following statements?A. Balance Sheet.B. Income Statement.C. Statement of Owners Equity.D. Statement of Cash Flows.E. Transaction Statement.10. A companys balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of owners equity?A. $17,000.B. $29,000.C. $71,000.D. $88,000.E. $105,000.11. The accounting process begins with:A. Analysis of business transactions and source documents.B. Preparing financial statements and other reports.C. Summarizing the recorded effect of business transactions.D. Presentation of financial information to decision-makers.E. Preparation of the trial balance.12. The account used to record the transfers of assets from a business to its owner is:A. A revenue account.B. The owners withdrawals account.C. The owners capital account.D. An expense account.E. A liability account.13. A written promise to pay a definite sum of money on a specified future date is a(n):A. Unearned revenue.B. Prepaid expense.C. Credit account.D. Note payable.E. Account receivable.14. A ledger is:A. A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item.B. A journal in which transactions are first recorded.C. A collection of documents that describe transactions and events entering the accounting process.D. A list of all accounts with their debit balances at a point in time.E. A record containing all accounts and their balances used by a company.15. Double-entry accounting is an accounting system:A. That records each transaction twice.B. That records the effects of transactions and other events in at least two accounts with equal debits and credits.C. In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits.D. That may only be used if T-accounts are used.E. That insures that errors never occur.16. Rocky Industries received its telephone bill in the amount of $300, and immediately paid it. Rockys general journal entry to record this transaction will include aA. Debit to Telephone Expense for $300.B. Credit to Accounts Payable for $300.C. Debit to Cash for $300.D. Credit to Telephone Expense for $300.E. Debit to Accounts Payable for $300.17. Management Services, Inc. provides services to clients. On May 1, a client prepaid Management Services $60,000 for 6-months services in advance. Management Services gene