Accounting 1 Diagnostic test

A business may only report transactions on accounting books that are specifically related to company operations, not those activities that affect the owner personally, is known as which of the following?

• separate entity concept

• monetary unit concept

• going concern assumption

• time period assumption

companies can present useful information in shorter time periods such as years, quarters, or months is known as which of the following?

• separate entity concept

• monetary measurement concept

• going concern assumption

• time period assumption

Which of the following does not accurately represent the accounting equation?

• Assets – Liabilities = Stockholders’ Equity

• Assets – Stockholders’ Equity = Liabilities

• Assets = Liabilities + Stockholders’ Equity

• Assets + Liabilities = Stockholders’ Equity

Which of these accounts is an asset?

• Owner's Capital

• Supplies

• Accounts Payable

• Service Income

Which process of the accounting cycle often requires the most analytical thought?

• making a journal entry

• posting transactions to accounts

• summarizing the trial balance

• preparing the financial statements

The step-by-step process to record business activities and events to keep financial records up to date is ________.

• day-to-day cycle

• accounting cycle

• general ledger

• journal

One operating cycle of a business, which could be a month, quarter, or year, is commonly referred to as which of the following?

• period

• round

• tally

• mark

________ takes all transactions from the journal during a period and moves the information to a general ledger.

• journalizing

• posting

• balancing

• transferring

Which of these events will not be recorded on the journal?

• A service is performed, but the payment is not collected on the same day.

• Supplies are purchased. They are not paid for; the company will be billed.

• A copy machine is ordered. It will be delivered in two weeks.

• Electricity has arrived but has not been paid for.

A company purchased a building twenty years ago for $150,000. The building currently has an appraised market value of $235,000. The company reports the building on its balance sheet at $235,000. What concept or principle has been violated?

• separate entity concept

• recognition principle

• accrual concept

• Historical cost principle