Mixed 78

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Question 1
The balance sheet shows:
A. the results of business operations.
B. all revenues and expenses.
C. the amount of net income or loss.
D. the financial position of a business at a given time.

Question 2
Amounts that a business must pay in the future are known as:
A. accounts receivable.
B. accounts payable.
C. capital.
D. expenses.

Question 3
Examples of assets are:
A. cash and accounts receivable.
B. cash and revenue.
C. cash and rent expense.
D. investments by the owner and revenue.

Question 4
A net loss results when:
A. expenses are greater than revenue.
B. assets are greater than liabilities.
C. revenue is greater than expenses.
D. expenses are greater than assets.

Question 5
The income statement shows:
A. the financial position of a business on a specific date.
B. revenue and owner’s equity.
C. the results of operations for a period of time.
D. the total value of the business.

Question 6
When the owner invests cash in a business:
A. assets and revenue increase.
B. assets increase and owner’s equity decreases.
C. liabilities decrease and owner’s equity increases.
D. assets and owner’s equity increase.

Question 7
When equipment is purchased on credit:
A. assets and liabilities increase.
B. assets increase and liabilities decrease.
C. assets and owner’s equity increase.
D. assets and expenses increase.

Question 8
When equipment is purchased for cash:
A. assets decrease and expenses increase.
B. one asset increases and another asset decreases.
C. assets and owner’s equity increase.
D. assets increase and liabilities decrease.

Question 9
When the owner withdraws cash for personal use:
A. assets decrease and expenses increase.
B. assets decrease and owner’s equity increases.
C. assets decrease and owner’s equity decreases.
D. owner’s equity decreases and revenue decreases.

Question 10
When the owner writes a company check to pay the firm’s electric bill:
A. assets and owner’s equity increase.
B. assets decrease and expenses increase.
C. assets and liabilities decrease.
D. expenses increase and owner’s equity increases.

Question 11
If liabilities are $4,000 and owner’s equity is $15,000, assets are:
A. $9,000.
B. $15,000.
C. $19,000.
D. $4,000.

Question 12
Assets and liabilities are reported on:
A. the balance sheet.
B. the income statement.
C. the statement of owner’s equity.
D. both the balance sheet and the income statement.

Question 13
The financial statement that is prepared first is:
A. up to the accountant.
B. the income statement.
C. the balance sheet.
D. the statement of owner’s equity.

Question 14
The rent paid for future months is a(n):
A. asset.
B. liability.
C. expense.
D. revenue.

Question 15
The statement of financial position is another term for which financial statement?
A. Income Statement
B. Statement of Owner’s Equity
C. Balance Sheet
D. Trial Balance

Question 16
Which statement is a depiction of the accounting equation?
A. Income Statement
B. Statement of Owner’s Equity
C. Balance Sheet
D. Profit and Loss Statement
Question 17
The Statement of Owner’s Equity is calculated as:
A. beginning capital + net income – withdrawals + additional investment = ending capital.
B. beginning capital + net loss + withdrawals + additional investment = ending capital.
C. beginning capital + net loss – withdrawals + additional investment = ending capital.
D. beginning capital + net income + withdrawals + additional investment = ending capital.
Question 18
The current worth of an asset is its:
A. original cost.
B. cost less accumulated depreciation.
C. asking price when put up for sale.
D. fair market value.
Question 19
Owner’s equity is the:
A. amount taken out of a business by the owner for personal use.
B. financial interest of the owner of a business.
C. amount the owner invested in the business.
D. revenues less the expenses.
Question 20
An expense by definition is NOT:
A. an amount a business must pay in the future.
B. an outflow of cash.
C. the use of other assets.
D. the incurring of a liability.