Multiple choice questions

$1.$ Which asset on the balance sheet is typically associated with depreciation?

A$)$ Land

B$)$ Property, plant & equipment $($PPE$)$

C$)$ Accounts receivable

D$)$ Inventory

$2.$ Which of the following is NOT an asset?

A$)$ Inventory

B$)$ Deferred revenue

C$)$ Accounts receivable

D$)$ Prepaid rent

$3.$ Double entry accounting means that each transaction:

A$)$ Is both recorded in the journal and the ledger

B$)$ Increases at least one account and decreases at least one account.

C$)$ Affects both an income statement account and a balance sheet account.

D$)$ Debits at least one account and credits at least one account.

$4.$ In the Statement of Cash Flows, new loans acquired from a bank are included in:

A$)$ Cash flows from accrual activities

B$)$ Cash flows from operating activities

C$)$ Cash flows from investing activities

D$)$ Cash flows from financing activities

$5.$ Under accrual accounting, revenue is recorded:

A$)$ When the services are performed, regardless of when the cash is received.

B$)$ Either when the cash is received or the sale is made.

C$)$ Only if the cash is received at the same time the services are performed.

D$)$ When the cash is collected, regardless of when the services are performed.

$6.$ A company paid cash for an amount owed to a creditor. This transaction decreased cash

and:

A$)$ Decreased liabilities

B$)$ Decreased expenses

C$)$ Increased expenses

D$)$ Decreased revenues