1. Which of the following is the accounting equation?

1. A+L= E
2. A= L+ E
3. A-L= -E
4. None of the above

2. Which of the following is not an asset?

1. Pre-paid rent
2. Accumulated depreciation
3. Merchandise Inventory
4. Note payable

3. Which of the following is not a financial statement?

1. Income statement
2. Balance sheet
3. Bank reconciliation
4. Statement of retained earnings

4. Which of the following accounts will not be found on the income statement?

1. Expenses
2. Revenue
3. Dividends
4. All the above

5. What is a trial balance?

1. A financial statement
2. A Chart of accounts
3. A chart of accounts with account balances
4. A list of assets

6. What is a sole proprietorship?

1. A business with multiple owners
2. A business with 2 or more owners
3. A business with many owners
4. A business with a single owner

7. Which of the following is a disadvantage of sole proprietorship?

1. Principle agent problem
2. Hard and expensive to set up
3. Poor access to capital
4. Double taxation

8. Which of the following is an advantage of corporate ownership?

1. Easy to set up
2. Limited liability
3. Favorable taxation
4. No longevity

9. Which of the following represents the appropriate order of the accounting cycle?

1. Journalize, post, adjust, reports, closing
2. Post, journalize, closing, adjustments, reports
3. Adjustments, reports, closing, post
4. Reports, closing, journalizing, posting

10. What is depreciation?

1. The loss in the value of an asset
2. The wearing down of an asset
3. The allocation of an assets cost over its useful life
4. The book value of an old asset

11. How is depreciation calculated?

1. C-S/L
2. (C-L)/ S
3. C/S
4. C-S

12. How do you determine the book value of an asset?

1. C- Dep Expense
2. C-S
3. C- Accumulated depreciation
4. C

13. Which of the following is a contra-asset?

1. Dividends
2. Unearned revenue
3. Accumulated depreciation
4. Merchandise Inventory

14. Temporary accounts are:

1. Balance sheet accounts
2. Income statement accounts
3. New accounts
4. Assets

15. What is accrued income?

1. Income earned but, not received
2. Received, but not earned
3. Earned and received
4. Income that has been received

16. What is deferred Income?

1. Earned, but not received
2. Income received, but not earned
3. Income received after was earned
4. None of the above

17. What entry would be made to acknowledge accrued wages?

1. Debit Expense, Credit Cash
2. Debit cash, Credit wages
3. Debit expense, Credit payable
4. Debit payable, Credit cash

18. Which of the following is NOT an asset?

1. Prepaid rent
2. Accumulated depreciation
3. Accounts payable
4. Accounts receivable

19. Which of the following is not a closing entry

1. Debit revenue, credit income summary
2. Debit income summary, credit expenses
3. Debit Account payable, credit income summary
4. Debit retained earnings, credit dividends

20. Which of the following is an example of a contra account?

1. Accumulated depreciation
2. Dividends
3. Income summary
4. A & B
5. All of the above