Question 1

Which of the following is TRUE regarding revenue and profit?

Accepted Answer

A) The terms revenue and profit mean the same thing. 
B) Both revenue and profit are found on the Income Statement. 
C) Profit equals liabilities plus Stockholders' Equity. 
D) Revenue is found on the Balance Sheet and profit is found on the Income Statement. 
A) The terms revenue and profit mean the same thing. 
B) Both revenue and profit are found on the Income Statement. 
C) Profit equals liabilities plus Stockholders' Equity. 
D) Revenue is found on the Balance Sheet and profit is found on the Income Statement.

Question 2

Amber owns Serenity Spa Resort. In her accounting records, she lists the buildings at their current market value. Which principle is Amber violating?

Accepted Answer

A) Reliability 
B) Cost 
C) Business entity 
D) None of the above 
A) Reliability 
B) Cost 
C) Business entity 
D) None of the above

Question 3

The first financial statement that is prepared is the:

Accepted Answer

A) Statement of Cash Flows. 
B) Income Statement. 
C) Statement of Retained Earnings. 
D) Balance Sheet. 
A) Statement of Cash Flows. 
B) Income Statement. 
C) Statement of Retained Earnings. 
D) Balance Sheet.

Question 4

The expense of using borrowed money for a period of time, is referred to as:

Accepted Answer

A) net income. 
B) revenue. 
C) liability. 
D) interest. 
A) net income. 
B) revenue. 
C) liability. 
D) interest.

Question 5

Accountants should be highly ethical and must do everything they can to prevent fraud.

Accepted Answer

A) True 
 B)False

Question 6

Syd's Coffee sells bagged coffee to grocery stores for resale-what type of business is this?

Accepted Answer

A) Service business 
B) Wholesale business 
C) Retail business 
D) None of the above 
A) Service business 
B) Wholesale business 
C) Retail business 
D) None of the above

Question 7

Liabilities are defined as:

Accepted Answer

A) earnings retained in the business. 
B) amounts owed to lenders or creditors. 
C) stockholders' claims to assets. 
D) future economic benefits of a company. 
A) earnings retained in the business. 
B) amounts owed to lenders or creditors. 
C) stockholders' claims to assets. 
D) future economic benefits of a company.

Question 8

The primary goal of any business is to

Accepted Answer

A) generate revenue. 
B) sell products for a profit. 
C) create value for its owners. 
D) avoid too much debt. 
A) generate revenue. 
B) sell products for a profit. 
C) create value for its owners. 
D) avoid too much debt.

Question 9

Information for Sassycat Inc.'s first year of operations is presented below:  
What was Sassycat's net income for the year?

Accepted Answer

A) $21,000 
B) $49,000 
C) $70,000 
D) Cannot be determined from the information given. 
A) $21,000 
B) $49,000 
C) $70,000 
D) Cannot be determined from the information given.

Question 10

Cash accounting recognizes business transactions when cash is received or paid.

Accepted Answer

A) True 
 B)False

Question 11

Business owners are paid interest on the money they have invested in the business.

Accepted Answer

A) True 
 B)False

Question 12

Liabilities are obligations owed to third parties.

Accepted Answer

A) True 
 B)False

Question 13

What do we call the result obtained when revenue is less than cost?

Accepted Answer

A) Loss 
B) Profit 
C) Value 
D) Risk 
A) Loss 
B) Profit 
C) Value 
D) Risk

Question 14

The payment of cash dividends would have which of the following effects on the accounting equation?

Accepted Answer

A) Increase Liabilities 
B) Decrease Stockholders' Equity 
C) Increase Assets 
D) Increase Stockholders' Equity 
A) Increase Liabilities 
B) Decrease Stockholders' Equity 
C) Increase Assets 
D) Increase Stockholders' Equity

Question 15

Businesses primarily exist to generate sales.

Accepted Answer

A) True 
 B)False

Question 16

Which of the financial statements includes a listing of assets owned by the company?

Accepted Answer

A) Statement of Cash Flows 
B) Income Statement 
C) Balance Sheet 
D) Statement of Retained Earnings 
A) Statement of Cash Flows 
B) Income Statement 
C) Balance Sheet 
D) Statement of Retained Earnings

Question 17

Of the financial statements, which is dated as of a specific date?

Accepted Answer

A) Statement of Cash Flows 
B) Income Statement 
C) Balance Sheet 
D) Statement of Retained Earnings 
A) Statement of Cash Flows 
B) Income Statement 
C) Balance Sheet 
D) Statement of Retained Earnings

Question 18

In the expanded accounting equation, revenues minus expenses are part of:

Accepted Answer

A) Assets. 
B) Retained Earnings. 
C) Liabilities. 
D) Dividends. 
A) Assets. 
B) Retained Earnings. 
C) Liabilities. 
D) Dividends.

Question 19

Which type of organization is NOT considered a not-for-profit?

Accepted Answer

A) Charities 
B) Churches 
C) Chinese restaurant 
D) All of the above are not-for-profits. 
A) Charities 
B) Churches 
C) Chinese restaurant 
D) All of the above are not-for-profits.

Question 20

Stockholders' Equity consists of Retained Earnings and Common Stock.

Accepted Answer

A) True 
 B)False

Which of the following is TRUE regarding revenue and profit?

Amber owns Serenity Spa Resort. In her accounting records, she lists the buildings at their current market value. Which principle is Amber violating?

The first financial statement that is prepared is the:

The expense of using borrowed money for a period of time, is referred to as:

Accountants should be highly ethical and must do everything they can to prevent fraud.

Syd's Coffee sells bagged coffee to grocery stores for resale-what type of business is this?

Liabilities are defined as:

The primary goal of any business is to

Information for Sassycat Inc.'s first year of operations is presented below: What was Sassycat's net income for the year?

Cash accounting recognizes business transactions when cash is received or paid.

Business owners are paid interest on the money they have invested in the business.

Liabilities are obligations owed to third parties.

What do we call the result obtained when revenue is less than cost?

The payment of cash dividends would have which of the following effects on the accounting equation?

Businesses primarily exist to generate sales.

Which of the financial statements includes a listing of assets owned by the company?

Of the financial statements, which is dated as of a specific date?

In the expanded accounting equation, revenues minus expenses are part of:

Which type of organization is NOT considered a not-for-profit?

Stockholders' Equity consists of Retained Earnings and Common Stock.

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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Exam 1: Business, Accounting, and You

Which of the following is TRUE regarding revenue and profit?

Amber owns Serenity Spa Resort. In her accounting records, she lists the buildings at their current market value. Which principle is Amber violating?

The first financial statement that is prepared is the:

The expense of using borrowed money for a period of time, is referred to as:

Accountants should be highly ethical and must do everything they can to prevent fraud.

Syd's Coffee sells bagged coffee to grocery stores for resale-what type of business is this?

Liabilities are defined as:

The primary goal of any business is to

Information for Sassycat Inc.'s first year of operations is presented below: What was Sassycat's net income for the year?

Cash accounting recognizes business transactions when cash is received or paid.

Business owners are paid interest on the money they have invested in the business.

Liabilities are obligations owed to third parties.

What do we call the result obtained when revenue is less than cost?

The payment of cash dividends would have which of the following effects on the accounting equation?

Businesses primarily exist to generate sales.

Which of the financial statements includes a listing of assets owned by the company?

Of the financial statements, which is dated as of a specific date?

In the expanded accounting equation, revenues minus expenses are part of:

Which type of organization is NOT considered a not-for-profit?

Stockholders' Equity consists of Retained Earnings and Common Stock.

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters