Who uses accounting information?

Select one:

a. The internal revenue service.

b. None of the listed.

c. Investors.

d. Corporate creditors.

e. Corporate treasury operations.

f. All of the listed.

g. Corporate executives.

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A corporation is:

Select one:

a. A business incorporated under the laws of a state and owned by a single proprietor.

b. A government agency.

c. A business chartered directly by Congress.

d. An unincorporated business owned by two or more persons.

e. A business incorporated under the laws of a state and owned by stockholders.

f. Only incorporated by the IRS.

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When a business purchases a truck with cash on hand, that transaction is reflected on the:

Select one:

a. Income statement.

b. Balance sheet.

c. Income statement, balance sheet, and cash flow statement.

d. Cash flow statement.

e. Balance sheet and cash flow statement.

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Which of the following statements is FALSE?

Select one:

a. The balance sheet represents a "snapshot" of the company's solvency and financial position.

b. The balance sheet reflects a company's profitability from operations.

c. The statement of cash flows shows the cash inflows and outflows over a period of time.

d. The income statement reflects a company's profitability during a period of time.

e. The statement of retained earnings shows the change in retained earnings between the beginning and end of a period.

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The basic accounting equation is:

Select one:

a. Stockholders' Equity SE equals Assets A + Liabilities L.

b. None of these.

c. Assets A equals Liabilities L + Stockholders' Salaries SS.

d. Assets A equals Cash C - Loans L - Stockholders' Equity SE.

e. Assets A equals Liabilities L + Stockholders' Equity SE.

f. Assets A equals Stockholders' Equity SE - Liabilities L.

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Of the five primary accounting concepts, which one assumes an indefinite future?

Select one:

a. None of the these.

b. Periodicity (time periods) concept.

c. The money measurement concept.

d. Exchange-price (or cost) concept (principle).

e. The business entity concept.

f. Going-concern (continuity) concept.

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The ending balance in retained earnings is shown in the:

Select one:

a. Statement of retained earnings and the balance sheet.

b. Balance sheet.

c. Statement of retained earnings.

d. Income statement.

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Which of the following is not a correct form of the accounting equation?

Select one:

a. Assets equals Liabilities + Stockholders' equity.

b. Assets - Liabilities equals Stockholders' equity.

c. Assets - Stockholders' equity equals Liabilities.

d. Assets + Stockholders' equity equals Liabilities

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When the stockholders invest cash in the business, what is the effect?

Select one:

a. None of these.

b. Both assets and liabilities increase.

c. Liabilities increase and stockholders' equity increases.

d. Both assets and stockholders' equity increase.

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When services are performed on account, what is the effect?

Select one:

a. Both cash and retained earnings increase.

b. Both cash and retained earnings decrease.

c. Accounts payable increases and retained earnings decreases.

d. Both accounts receivable and retained earnings increase.

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(T / F) The matching principle is fundamental to the accrual basis of accounting.

Select one:

True

False (30 marks)