Question 1

Payment of expenses 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 2

What do we call amounts of money borrowed from lenders?

Accepted Answer

A) Asset 
B) Liability 
C) Expense 
D) Revenue 
A) Asset 
B) Liability 
C) Expense 
D) Revenue

Question 3

Liabilities are defined as:

Accepted Answer

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

Question 4

How would the purchase of a computer on account affect the accounting equation?

Accepted Answer

A) Assets increase;Liabilities decrease. 
B) Assets increase;Stockholder Equity increases. 
C) Assets increase;Liabilities increase. 
D) Assets decrease;Liabilities increase. 
A) Assets increase;Liabilities decrease. 
B) Assets increase;Stockholder Equity increases. 
C) Assets increase;Liabilities increase. 
D) Assets decrease;Liabilities increase.

Question 5

An increase in revenues would have which of the following effects on the accounting equation?

Accepted Answer

A) Decrease Stockholders' Equity 
B) Increase Common Stock 
C) Increase Liabilities 
D) Increase Stockholders' Equity 
A) Decrease Stockholders' Equity 
B) Increase Common Stock 
C) Increase Liabilities 
D) Increase Stockholders' Equity

Question 6

The owner of Good Dog Daycare wrote a company check to pay her personal credit card bill.What accounting principle did she violate?

Accepted Answer

A) Cost 
B) Reliability 
C) Business entity 
D) No principle is violated-the bank account belongs to her,so it's okay to write checks. 
A) Cost 
B) Reliability 
C) Business entity 
D) No principle is violated-the bank account belongs to her,so it's okay to write checks.

Question 7

Amounts owed to a company by its customers are classified as:

Accepted Answer

A) payables. 
B) dividends. 
C) cash. 
D) receivables. 
A) payables. 
B) dividends. 
C) cash. 
D) receivables.

Question 8

Beginning Retained Earnings are $65,000;sales are $29,500;expenses are $33,000;and dividends paid are $3,500.How much is the amount in ending Retained Earnings?

Accepted Answer

A) $58,000 
B) $61,500 
C) $68,500 
D) $65,000 
A) $58,000 
B) $61,500 
C) $68,500 
D) $65,000

Question 9

Taking an inventory of goods on hand would be representative of what accounting concept or principle?

Accepted Answer

A) Going concern 
B) Objectivity 
C) Business entity 
D) Cost 
A) Going concern 
B) Objectivity 
C) Business entity 
D) Cost

Question 10

Liabilities represent:

Accepted Answer

A) items owned by the company. 
B) economic resources of the company. 
C) earnings kept in the business. 
D) amounts owed to third parties. 
A) items owned by the company. 
B) economic resources of the company. 
C) earnings kept in the business. 
D) amounts owed to third parties.

Question 11

Liabilities are obligations owed to third parties.

Accepted Answer

A) True 
 B)False

Question 12

Cash and Accounts Receivable are both a part of:

Accepted Answer

A) Assets. 
B) Retained Earnings. 
C) Liabilities. 
D) Common Stock. 
A) Assets. 
B) Retained Earnings. 
C) Liabilities. 
D) Common Stock.

Question 13

The correct order for the preparation of financial statements is:
1)Statement of Cash Flows
2)Income Statement
3)Balance Sheet
4)Statement of Retained Earnings

Accepted Answer

A) 4,3,2,1. 
B) 1,2,3,4. 
C) 2,3,4,1. 
D) 2,4,3,1. 
A) 4,3,2,1. 
B) 1,2,3,4. 
C) 2,3,4,1. 
D) 2,4,3,1.

Question 14

A business may be either a for-profit business or a not-for-profit business.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following events would be recorded in the financial accounting records of Acme Lawn Service,Inc.?

Accepted Answer

A) Acme mows 125 lawns. 
B) Acme buys 5 new lawn mowers from Lawn Equipment,Inc. 
C) Lawn Equipment,Inc.sells 2 mowers to Acme's competitor,Best Lawns,Inc. 
D) Events A and B should both be recorded in the financial accounting records of Acme. 
A) Acme mows 125 lawns. 
B) Acme buys 5 new lawn mowers from Lawn Equipment,Inc. 
C) Lawn Equipment,Inc.sells 2 mowers to Acme's competitor,Best Lawns,Inc. 
D) Events A and B should both be recorded in the financial accounting records of Acme.

Question 16

Which type of business organization is owned by its stockholders?

Accepted Answer

A) Corporation 
B) Partnership 
C) Limited liability company 
D) Sole proprietorship 
A) Corporation 
B) Partnership 
C) Limited liability company 
D) Sole proprietorship

Question 17

According to the textbook,in order for an organization to be called a business it must:

Accepted Answer

A) exchange a product with a customer. 
B) make money. 
C) be a corporation. 
D) provide a service. 
A) exchange a product with a customer. 
B) make money. 
C) be a corporation. 
D) provide a service.

Question 18

Which of the following financial statements illustrates the accounting equation?

Accepted Answer

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

Question 19

Consider Accounts Receivable and Accounts Payable.Which of the following statements is TRUE?

Accepted Answer

A) Accounts Receivable is a liability and Accounts Payable is an asset. 
B) Accounts Receivable is an asset and Accounts Payable is an asset. 
C) Accounts Receivable is an asset and Accounts Payable is a liability. 
D) Accounts Receivable is a liability and Accounts Payable is a liability. 
A) Accounts Receivable is a liability and Accounts Payable is an asset. 
B) Accounts Receivable is an asset and Accounts Payable is an asset. 
C) Accounts Receivable is an asset and Accounts Payable is a liability. 
D) Accounts Receivable is a liability and Accounts Payable is a liability.

Question 20

To manage a business effectively,an owner or manager would benefit greatly from having some knowledge of accounting.

Accepted Answer

A) True 
 B)False

Payment of expenses would have which of the following effects on the accounting equation?

What do we call amounts of money borrowed from lenders?

Liabilities are defined as:

How would the purchase of a computer on account affect the accounting equation?

An increase in revenues would have which of the following effects on the accounting equation?

The owner of Good Dog Daycare wrote a company check to pay her personal credit card bill.What accounting principle did she violate?

Amounts owed to a company by its customers are classified as:

Beginning Retained Earnings are $65,000;sales are $29,500;expenses are $33,000;and dividends paid are $3,500.How much is the amount in ending Retained Earnings?

Taking an inventory of goods on hand would be representative of what accounting concept or principle?

Liabilities represent:

Liabilities are obligations owed to third parties.

Cash and Accounts Receivable are both a part of:

The correct order for the preparation of financial statements is: 1)Statement of Cash Flows 2)Income Statement 3)Balance Sheet 4)Statement of Retained Earnings

A business may be either a for-profit business or a not-for-profit business.

Which of the following events would be recorded in the financial accounting records of Acme Lawn Service,Inc.?

Which type of business organization is owned by its stockholders?

According to the textbook,in order for an organization to be called a business it must:

Which of the following financial statements illustrates the accounting equation?

Consider Accounts Receivable and Accounts Payable.Which of the following statements is TRUE?

To manage a business effectively,an owner or manager would benefit greatly from having some knowledge of accounting.

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

Payment of expenses would have which of the following effects on the accounting equation?

What do we call amounts of money borrowed from lenders?

Liabilities are defined as:

How would the purchase of a computer on account affect the accounting equation?

An increase in revenues would have which of the following effects on the accounting equation?

The owner of Good Dog Daycare wrote a company check to pay her personal credit card bill.What accounting principle did she violate?

Amounts owed to a company by its customers are classified as:

Beginning Retained Earnings are $65,000;sales are $29,500;expenses are $33,000;and dividends paid are $3,500.How much is the amount in ending Retained Earnings?

Taking an inventory of goods on hand would be representative of what accounting concept or principle?

Liabilities represent:

Liabilities are obligations owed to third parties.

Cash and Accounts Receivable are both a part of:

The correct order for the preparation of financial statements is: 1)Statement of Cash Flows 2)Income Statement 3)Balance Sheet 4)Statement of Retained Earnings

A business may be either a for-profit business or a not-for-profit business.

Which of the following events would be recorded in the financial accounting records of Acme Lawn Service,Inc.?

Which type of business organization is owned by its stockholders?

According to the textbook,in order for an organization to be called a business it must:

Which of the following financial statements illustrates the accounting equation?

Consider Accounts Receivable and Accounts Payable.Which of the following statements is TRUE?

To manage a business effectively,an owner or manager would benefit greatly from having some knowledge of accounting.

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