1, A corporation is a business that is legally separate and distinct from its owners.

True

False

2, Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management.

True

False

3, Proprietorships are owned by one owner and provide only services to their customers.

True

False

4, If a building is appraised for $85,000, offered for sale at $90,000, and the buyer pays $80,000 cash for it, the buyer would record the building at $85,000.

True

False

5, Assets are

: financed by the owner and/or creditors

: the same as expenses because they are acquired with cash

: equal to liabilities less owner's equity

: always lower than liabilities

6, A cash payment is recorded in the cash account as

: either a debit or a credit

: a credit

: neither a debit or a credit

: a debit

7, Office supplies purchased by Janer's Cleaning Service on account were returned. Which of the following entries for Janer's Cleaning Service records this transaction?

: Office Supplies, debit; Accounts Receivable, credit

: Cash, debit; Office Supplies, credit

: Office Supplies, debit; Accounts Payable, credit

: Accounts Payable, debit; Office Supplies, credit

8, Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service.

: Cash, debit; Rent Expense credit.

: Cash, debit; Unearned Rent, credit.

: Prepaid Rent, debit; Rent Revenue, credit.

: Cash, debit; Prepaid Rent, credit.

9, Which of the following will increase owner's equity?

: cash is received from customers on account

: the owner draws money for personal use

: revenues > expenses.

: expenses > revenues.

10, The purchase of supplies on account was recorded and posted as a debit to Supplies for $500 and a credit to Accounts Receivable for $500. The correcting entry would include a:

: credit to Accounts Receivable for $1,000

: credit to Accounts Receivable for $500

: credit to Accounts Payable for $1,000

: credit to Accounts Payable for $500