1.The purpose of the income statement is to show the:

A. Change in fair value of the assets from the prior income statement

B. market value per share of stock at the date of the statement

C. only the revenues collected

D. net income or net loss for the period covered by the statement

2. Which of the following types of accounting is primarily used by those within the organization and is often used for planning purposes?

A. Financial Accounting

B. Auditing

C. Managerial Accounting

D. Income Tax Accounting

3. Retained earnings represents:

A. the amount invested in the entity by the stockholders

B. cash is available for dividends

C. cumulative new income that has not been distributed to stockholders as dividends

D. par value of common stock outstanding

4. On December 31, an entity's balance sheet showed total assets of $750 and liabilities of $250. Stockholders equity at December 31 was:

A. $500

B. $1,000

C. $750

D. $250

5. Jones, Inc. borrowed $5,000 for 3 months at an APR of 10%. The amount of interest paid on this loan was:

A. $240

B. $120

C. $125

D. $500

6. If current assets are $250,000 and current liabilities are $125,000, what is working capital?

A. $375,000

B. $125,000

C. $150,000

D. $250,000

7. In accounting, the matching principle means to match which of the following?

A. revenues to assets

B. revenues to expenses

C. expenses to assets

D. expenses to liabilities

8. Which of the following is the accounting equation?

A. Assets + Liabilities= Stockholder's Equity

B. Assets= Liabilities + Stockholders Equity

C. Assets/Revenue = Expenses

D. Liabilities + Expenses= Stockholders Equity

9. Accounts receivable are reported at:

A. net realizable value

B. historical cost

C. weighted average cost

D. market value

10. Which of the following is not one of the three broad categories presented in the statement of cash flows?

A. Financing Activities

B. Operating Activities

C. Income Activities

D. Investing Activities