Question

1. Information provided by financial accounting is

Select one:

A. Only applicable to business entities, not individuals.

B. Only applicable to corporations.

C. Intended to help creditors and investors.

D. Primarily designed to assist internal users in managing the business.

Question 2

Which of the following statement is not a description of accounting?

Select one:

A. The purpose of accounting is to record financial transactions of a business entity.

B. Accounting is the language of business.

C. Accounting is used by individuals, businesses, non-profit entities, and governments.

D. Accounting is used for decision-making.

Question 3

All transactions listed below are recordable except:

Select one:

A. The exchange of land for equipment.

B. Dividends declared but not yet distributed.

C. A sales order received by a business.

D. Furniture purchased on account.

Question 4

External users of accounting information have a financial interest in an entity and are involved with the day-to-day operations of the enterprise.

Select one:

True

False

Question 5

Retain earnings increase when a company issues shares of capital stock.

Select one:

True

False

Question 6

The going concern means the auditors are concerned that the company is going out of business.

Select one:

True

False

Question 7

Which of the following statements is correct from an accounting viewpoint when talking about a business being an entity separate from its owners?

Select one:

A. A business is always an accounting entity separate from the activities of the owners.

B. A business is never an accounting entity separate from the activities of the owners when organized as a sole proprietorship.

C. A business is only an accounting entity separate from the activities of the owners when organized as a corporation.

D. A business is only an accounting entity separate from the activities of the owners when organized as a corporation or a partnership.

Question 8

The accountant of XYZ Corporation adjusts the recorded value of assets to their market value yearly. This approach violates:

Select one:

A. The stable-dollar assumption.

B. The consistency principle.

C. The cost principle.

D. The accounting equation.

Question 9

Which of the following transactions would decrease both assets and owners' equity?

Select one:

A. Borrowing money from a bank.

B. Paying dividends in cash.

C. Repaying a bank loan with cash.

D. Investment of cash in the business by the owner.

Question 10

Which of the following assets would most likely be listed first on a statement of financial position?

Select one:

A. Equipment

B. Furniture

C. Land

D. Inventory

Answer 1

1. D primarily designed to assist internal users

2.D accounting is used for decision making is wrong

3. C a sales order received

4. False

5. False

6. False

7. B

8.C

9.B

10. LAND