1.The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:Going-concern assumption.Business entity assumption.Objectivity principle.Cost Principle.Monetary unit assumption. 2.A partnership:Is also called a sole proprietorship.Has unlimited liability for its partners.Has to have a written agreement in order to be legal.Is a legal organization separate from its owners.Has owners called shareholders. 3.The difference between a company’s assets and its liabilities, or net assets is:Net income.Expense.Equity.Revenue.Net loss. 4.Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?Going-concern assumption.Matching principle.Cost principle.Business entity assumption.Consideration assumption. 5.The primary objective of financial accounting is:To serve the decision-making needs of internal users.To provide financial statements to help external users analyze an organization’s activities.To monitor and control company activities.To provide information on both the costs and benefits of looking after products and services.To know what, when, and how much to produce. 6.All of the following are true regarding ethics except:Ethics are beliefs that separate right from wrong.Ethics rules are often set for CPAs.Ethics do not affect the operations or outcome of a company.Are critical in accounting.Ethics can be hard to apply. 7.Social responsibility:Is a concern for the impact of our actions on society.Is a code that helps in dealing with confidential information.Is required by the SEC.Requires that all businesses conduct social audits.Is limited to large companies. 8.The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:Accounting equation.Cost principle.Going-concern assumption.Realization principle.Business entity assumption. 9.All of the following regarding a Certified Public Accountant are true except:Must meet education and experience requirements.Must pass an examination.Must exhibit ethical character.May also be a Certified Management Accountant.Cannot hold any certificate other than a CPA. 10.Decreases in equity that represent costs of assets or services used to earn revenues are called:Liabilities.Equity.Withdrawals.Expenses.Owner’s Investment. 11.The record in which transactions are first recorded is the:Account balance.Ledger.Journal.Trial balance.Cash account. 12.A collection of all accounts and their balances used by a business is called a:Journal.Book of original entry.General Journal.Balance column journal.Ledger. 13.A ledger is:A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item.A journal in which transactions are first recorded.A collection of documents that describe transactions and events entering the accounting process.A list of all accounts with their debit balances at a point in time.A record containing all accounts and their balances used by a company. 14.The account used to record the transfers of assets from a business to its owner is:A revenue account.The owner’s withdrawals account.The owner’s capital account.An expense account.A liability account. 15.If the Debit and Credit column totals of a trial balance are equal, then:All transactions have been recorded correctly.All entries from the journal have been posted to the ledger correctly.All ledger account balances are correct.The total debit entries and total credit entries are equal.The balance sheet would be correct. 16.Source documents:Include the ledger.Are the sources of accounting information.Must be in electronic form.Are based on accounting entries.Include the chart of account. 17.A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n):Account balance.Trial balance.Ledger.Chart of accounts.General Journal. 18.An asset created by prepayment of an expense is:Recorded as a debit to an unearned revenue account.Recorded as a debit to a prepaid expense account.Recorded as a credit to an unearned revenue account.Recorded as a credit to a prepaid expense account.Not recorded in the accounting records until the earnings process is complete 19.A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):Account.Trial balance.Journal.T-account.Balance column account.
1.The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:Going-concern assumption.Business entity assumption.Objectivity principle.Cost Principle.Monetary unit assumption.
2.A partnership:Is also called a sole proprietorship.Has unlimited liability for its partners.Has to have a written agreement in order to be legal.Is a legal organization separate from its owners.Has owners called shareholders.
3.The difference between a company’s assets and its liabilities, or net assets is:Net income.Expense.Equity.Revenue.Net loss.
4.Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?Going-concern assumption.Matching principle.Cost principle.Business entity assumption.Consideration assumption.
5.The primary objective of financial accounting is:To serve the decision-making needs of internal users.To provide financial statements to help external users analyze an organization’s activities.To monitor and control company activities.To provide information on both the costs and benefits of looking after products and services.To know what, when, and how much to produce.
6.All of the following are true regarding ethics except:Ethics are beliefs that separate right from wrong.Ethics rules are often set for CPAs.Ethics do not affect the operations or outcome of a company.Are critical in accounting.Ethics can be hard to apply.
7.Social responsibility:Is a concern for the impact of our actions on society.Is a code that helps in dealing with confidential information.Is required by the SEC.Requires that all businesses conduct social audits.Is limited to large companies.
8.The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:Accounting equation.Cost principle.Going-concern assumption.Realization principle.Business entity assumption.
9.All of the following regarding a Certified Public Accountant are true except:Must meet education and experience requirements.Must pass an examination.Must exhibit ethical character.May also be a Certified Management Accountant.Cannot hold any certificate other than a CPA.
10.Decreases in equity that represent costs of assets or services used to earn revenues are called:Liabilities.Equity.Withdrawals.Expenses.Owner’s Investment.
11.The record in which transactions are first recorded is the:Account balance.Ledger.Journal.
12.A collection of all accounts and their balances used by a business is called a:Journal.Book of original entry.General Journal.Balance column journal.Ledger.
13.A ledger is:A record containing increases and decreases in a specific asset, liability, equity, revenue, or expense item.A journal in which transactions are first recorded.A collection of documents that describe transactions and events entering the accounting process.A list of all accounts with their debit balances at a point in time.A record containing all accounts and their balances used by a company.
14.The account used to record the transfers of assets from a business to its owner is:A revenue account.The owner’s withdrawals account.The owner’s capital account.An expense account.A liability account.
15.If the Debit and Credit column totals of a trial balance are equal, then:All transactions have been recorded correctly.All entries from the journal have been posted to the ledger correctly.All ledger account balances are correct.The total debit entries and total credit entries are equal.The
16.Source documents:Include the ledger.Are the sources of accounting information.Must be in electronic form.Are based on accounting entries.Include the chart of account.
17.A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n):Account balance.Trial balance.Ledger.Chart of accounts.General Journal.
18.An asset created by prepayment of an expense is:Recorded as a debit to an unearned revenue account.Recorded as a debit to a prepaid expense account.Recorded as a credit to an unearned revenue account.Recorded as a credit to a prepaid expense account.Not recorded in the accounting records until the earnings process is complete
19.A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):Account.Trial balance.Journal.T-account.Balance column account.
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