1.

Which resource provider typically receives first priority when resources are divided as part of a business's liquidation?

Select one:

a.

The company's managers

b.

Stockholders

c.

Creditors

d.

Owners

2.

If a company's total assets decreased while liabilities and common stock were unchanged, and no dividends were paid, then

Select one:

a.

revenues were less than expenses.

b.

cash flow from operating activities was greater than cash flow from investing activities.

c.

retained earnings were less than net income during the period.

d.

the company must have purchased assets with cash

3.

The transaction, "earned cash revenue," affects which two accounts?

Select one:

a.

Cash and Revenue

b.

Revenue and Salaries Expense

c.

Cash and Notes Payable

d.

Cash and Dividends

4.

Policies and procedures designed to reduce the opportunities for fraud are often called:

Select one:

a.

internal controls

b.

accounting principles

c.

asset source transactions

d.

financial systems

5.

Borrowing cash from the bank is an example of which type of transaction?

Select one:

a.

Asset source

b.

Asset exchange

c.

Claims use

d.

Asset use

e.

Asset source

6.

The purpose of the accrual basis of accounting is to:

Select one:

a.

Improve the matching of revenue and expense in the proper period.

b.

Report revenue when received.

c.

Report expenses when cash disbursements are made.

d.

Improve the company's earnings per share.

7.

Expenses that are matched with the period in which they are incurred are frequently called:

Select one:

a.

period costs

b.

market expenses

c.

matching expenses

d.

working cost

8.

In which section of a statement of cash flows would the purchase of land for cash be reported?

Select one:

a.

Investing activities

b.

Financing activities.

c.

Operating activities.

d.

Purchasing activities.

9.

Expenses are shown on the

Select one:

a.

income statement.

b.

statement of cash flows.

c.

statement of changes in stockholders' equity.

d.

both b and c.

10.

The recognition of an expense may be accompanied by which of the following?

Select one:

a.

An increase in liabilities

b.

An increase in assets

c.

A decrease in liabilities

d.

A decrease in revenue