$1.$ Three types of businesses that operate for profit are manufacturing, merchandising and service businesses.

a$.$ True

b$.$ False

$2.$ The initials GAAP stand for generally accepted accounting principles.

a$.$ True

b$.$ False

$3.$ The Financial Accounting Standards board is the authoritative body that has primary responsibility for developing accounting principles.

a$.$ True

b$.$ False

$4.$ The accounting equation can be expressed as Liabilities $+$ Assets $=$ Owner$$s Equity.

a$.$ True

b$.$ False

$5.$ The accounting equation can be expressed as Assets $=$ Liabilities $+$ Owner$$s Equity

a$.$ True

b$.$ False

$6.$ The accounting equation can be expressed as Assets $-$ Liabilities $=$ Owner$$s Equity

a$.$ True

b$.$ False

$7.$ If the assets owned by a business total $$90,000$ and liabilities total $$50,000,$ owner$$s equity totals $40,000.$

a$.$ True

b$.$ False

$8.$ If the assets owned by a business total $$90,000$ and liabilities total $$50,000,$ owner$$s equity totals $140,000.$

a$.$ True

b$.$ False

$9.$ If the total assets owned by a business total $$110,000$ and owner$$s equity totals $30,000,$ liabilities total $$80,000.$

a$.$ True

b$.$ False

$10.$ The excess revenue over the expenses incurred in earning the revenue is called net income.

a$.$ True

b$.$ False

$11.$ The excess of expenses over revenue is called net loss.

a$.$ True

b$.$ False

$12.$ A balance sheet is a list of the assets, liabilities, and owner$$s equity of a business as of a specific date.

a$.$ True

b$.$ False

$13.$ A balance sheet reports the revenues and expenses for a period of time.

a$.$ True

b$.$ False

$14.$ An income statement is a summary of the revenues and expenses of a business for a specific period of time.

a$.$ True

b$.$ False

$15.$ The statement of cash flows consists of an asset section, an income section, and an equity section

a$.$ True

b$.$ False

$16.$ A group of related accounts that make up a complete unit us called a ledger.

a$.$ True

b$.$ False

$17.$ A chart of accounts is a listing of accounts that make up ledger.

a$.$ True

b$.$ False

$18.$ Equipment is an example of a liability.

a$.$ True

b$.$ False

$19.$ Building is an example of an asset.

a$.$ True

b$.$ False

$20.$ Accounts Receivable is an example of an asset.

a$.$ True

b$.$ False

$21.$ Accounts payable is an example of a liability.

a$.$ True

b$.$ False

$22.$ Drawings are a commonly used term for liabilities.

a$.$ True

b$.$ False

$23.$ The right side of the account is referred to as the debit side.

a$.$ True

b$.$ False

$24.$ The tree parts of a T account are the title, a space for recording increases, and a space for recording decreases

a$.$ True

b$.$ False

$25.$ Expense accounts are increased by debits.

a$.$ True

b$.$ False