Question
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.
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)
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