Introduction to Accounting quiz

Financial Accounting Quiz

بواسطة admin في سبتمبر 3, 2023 0

Introduction to Accounting

1 / 15

The financial statement that reports assets, liabilities, and owner’s equity is the :

A) owner’s equity statement

B) income statement

C) balance sheet

D) statement of cash ﬂows

2 / 15

During 2023, the Company’s assets decreased $50,000 and its liabilities decreased $90,000. Its owner’s equity therefore :

A) increased $140,000

B) increased $40,000

C) decreased $140,000

D) decreased $40,000

3 / 15

Which of the following statements about users of accounting information is incorrect ?

A) Regulatory authorities are internal users

B) Management is an internal user

C) Taxing authorities are external users

D) Present creditors are external users

4 / 15

Which of the following statements about basic assumptions is correct ?

A) The monetary unit assumption enables accounting to measure employee morale

B) The economic entity assumption states that there should be a particular unit of accountability

C) Partnerships are not economic entities

D) Basic assumptions are the same as accounting principles

5 / 15

Which of the following statements is false ?

A) A statement of cash ﬂ ows summarizes information about the cash inﬂ ows (receipts) and outﬂ ows (payments) for a specif c period of time

B) A balance sheet reports the assets, liabilities, and owner’s equity at a specifc date

C) An owner’s equity statement summarizes the changes in owner’s equity for a specif c period of time

D) An income statement presents the revenues, expenses, changes in owner’s equity, and resulting net income or net loss for a specif c period of time

6 / 15

Performing services on account will have the following effects on the components of the basic accounting equation :

A) increase assets and increase liabilities

B) increase assets and decrease owner’s equity

C) increase liabilities and increase owner’s equity

D) increase assets and increase owner’s equity

7 / 15

The three types of business entities are :

A) proprietorships, partnerships, and large businesses

B) proprietorships, small businesses, and partnerships

C) fnancial, manufacturing, and service companies

D) proprietorships, partnerships, and corporations

8 / 15

The historical cost principle states that :

A) assets should be recorded at their cost

B) assets should be initially recorded at cost and adjusted when the fair value changes

C) activities of an entity are to be kept separate and distinct from its owner

D) only transaction data capable of being expressed in terms of money be included in the accounting records

9 / 15

Services performed by a public accountant include :

A) internal auditing, budgeting, and management consulting

B) auditing, budgeting, and cost accounting

C) auditing, budgeting, and management consulting

D) auditing, taxation, and management consulting

10 / 15

Which of the following events is not recorded in the accounting records ?

A) The owner withdraws cash for personal use

B) Equipment is purchased on account

C) A cash investment is made into the business

D) An employee is terminated

11 / 15

As of December 31, 2023, the Company has assets of $3,500 and owner’s equity of $2,000. What are the liabilities for the Company as of December 31, 2023 ?

A) $2,500

B) $1,500

C) $1,000

D) $2,000

12 / 15

Payment of an account payable affects the components of the accounting equation in the following way :

A) Decreases owner’s equity and decreases liabilities

B) Decreases assets and decreases liabilities

C) Decreases assets and increases owner’s equity

D) Increases assets and decreases liabilities

13 / 15

Which of the following is not a step in the accounting process?

A) Recording

B) Identifcation

C) Verifcation

D) Communication

14 / 15

On the last day of the period, the Company buys a $900 machine on credit. This transaction will affect the:

A) income statement and owner’s equity statement only

B) income statement, owner’s equity statement, and balance sheet

C) balance sheet only

D) income statement only

15 / 15

Net income will result during a time period when :

A) revenues exceed expenses

B) assets exceed liabilities

C) expenses exceed revenues

D) assets exceed revenues

Your score is

The Basic Accounting Equation

Financial Statements

users and uses of accounting

monetary unit assumption and the economic entity assumption