C- Choose the correct answer for the following items. (10marks, 1 mark each) 1)

Which of the following is an external user of a business's financial information?

A) Customers

B) Cost accountant

C) Company manager

D) The board of directors

2) Which of the following is a liability account?

A) Notes Payable

B) Cash

C) Building

D) Accounts Receivable

3) Arky Corporation records business transactions in dollars and disregards changes in the value of a dollar over time. Which of the following accounting assumptions does this represent?

A) economic entity assumption

B) going concern assumption

C) accounting period assumption

D) monetary unit assumption

4) The assets of Mora Company are $120,000 and the total liabilities are $20,000. The equity is ________.

A) $160,000

B) $220,000

C) $60,000

D) $100,000

5) Porto Landscaping Services incurred $500 as a labor expense and promised to pay the labor agency within 30 days. Which of the following accounts will increase as a result of this transaction?

A) Accounts Receivable

B) Cash

C) Accounts Payable

D) Retained Earnings

6) Which of the following statements is true of a trial balance?

A) A trial balance is the first step in the accounting cycle.

B) A trial balance is also known as a balance sheet.

C) A trial balance is a list of all accounts with their balances.

D) A trial balance is also known as the chart of accounts.

7) Which of the following statements is true of a sole proprietorship?

A) A sole proprietorship joins two or more individuals as co-owners.

B) The sole proprietor is personally liable for the liabilities of the business.

C) A sole proprietorship is taxed separately from the owner.

D) A sole proprietorship has to pay business income taxes.

8) A debit is not the normal balance for which of the following?

A) Asset account

B) Dividends account

C) Expense account

D) Share capital-ordinary account

9) Which of the following statements is false?

A) Revenues increase equity.

B) Revenues have normal credit balances.

C) Revenues are a positive factor in the computation of net income.

D) Revenues are increased by debits.

10) Which one of the following account groups normally has a credit balance?

A) Liabilities and revenues

B) Equity and assets

C) Assets and liabilities

D) Assets and expenses