1. Which of the following would most likely be found in the expenses section of a chart of accounts?

A. Accounts receivable

B. Salaries payable

C. Utilities

D. Capital stock

2. When looking at the names of accounts and determining where they belong, the term deferred is usually used to show:

A. Something that is to be received or earned later.

B. An amount owed for services received now.

C. The same as the term accrued.

D. Only amounts associated with stockholders equity.

3. Cash invested by stockholders in the company in return for stock will have the following effect:

A. Increase expenses

B. Decrease current liabilities

C. Increase revenue

D. Increase current assets

4. Which of the following is NOT a way that assets change on the accounting equation?

A. One asset is exchanged for another asset.

B. An asset is earned by providing goods or services to customers.

C. An asset is purchased by using a liability.

D. All of the above are examples of how assets can change.

5. Using cash to pay off a loan that is due in 10 years will have the following effect on the accounting equation:

A. A decrease in long term liabilities

B. An increase in current assets

C. A decrease in revenues

D. An increase in long term assets

6. Interest Earned would most likely be reported on which of the financial statements?

A. Balance sheet

B. Income statement

C. Statement of stockholders equity

D. Statement of contingencies

7. Marvin Inc. sells products to customers for $250 that originally cost $150. The total impact on the expanded accounting equation of this transactions is:

A. Increase in current liabilities for $100.

B. Increase in current assets for $100.

C. Increase in retained earnings for $250.

D. Decrease in retained earnings for $150.

8. From the dividends column of the expanded accounting equation worksheet, the total would go on which of the financial statements?

A. Statement of stockholders equity.

B. Income statement

C. Balance sheet

D. Statement of amounts received by owners

9. If amounts of cash are received from a customer and under the revenue recognition model, they are determined to have not been earned yet, the company receiving the cash would properly:

A. Increase assets

B. Increase liabilities

C. Increase revenue

D. Increase expenses