1 Financial statement users can safely assume that the statements reflect a business that is going to continue its operations at least 12 months into the future unless clearly notified.

a.True

b.False

2. Select the correct statement

a.If revenues are debited revenues increases

b.If revenues are credited, revenues increase

c.If assets are debited assets decrease

d.If liabilities are credited, liabilities decrease.

3 It is the advantage in FIFO method that Cost of goods sold does not reflect current costs, so does not accurately match expenses to revenue.

a.True

b.False

4. An account having following properties is known as: Costs paid in advance of receiving their benefits, They are recorded as assets, As these assets are used, their costs become expenses,These costs expire with the passage of time or through use and consumption, e.g., insurance, supplies.

a.Revenue

b.Current Asset

c.Prepaid Expense

d.Accrual

5. Select the correct statement regarding transportation expense payment:

a.If FOB Destination, paid by buyer

b.None of above

c.If FOB shipping point, paid by seller

6. Income statements must be formatted in a variety of ways.

a.False

b.True

d.If FOB shipping point, paid by buyer

7 Adjustments are only made when financial statements are prepared. Never affect cash.

a.False

b.True

8 Errors in the computation of or physical count of merchandise inventory will cause a misstatement of Cost of goods sold.

a.True

b.False

9. Select one item from below which contains all accounts used by a business.

a.Ledger

b.Journal

c.General Journal

d.Balance Sheet

10

A whole seller is company that buys products from manufacturers or other wholesalers and sells them to retailers or other wholesalers.

a.True

b.False