ACC2

QN=61 A company's balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of owner's equity?

• c. $71,000.

• b. $29,000.

QN=62 Gross increases in equity from a company's earnings activities are:

• b. Revenues.

• a. Assets.

QN=63 How many accounts does every business transaction affect at least?

• b. 2

• e. Infinite

QN=64 The accounting assumption that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

• b. Business entity assumption.

• c. Going-concern assumption.

QN=65 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:

• a. Going-concern principle.

• c. Objectivity principle.

QN=66 Prepaid expenses are:

• d. Assets that represent prepayments of future expenses.

• b. Classified as liabilities on the balance sheet.

QN= 67 External users of accounting information exclude:

• b. Manager.

• d. Government regulators.

QN=68 The rule that financial statements will be prepared with the assumption that the business will continue operating instead of being closed or sold, is the:

• a. On - Going-concern principle.

• c. Matching principle.

QN=69 The accounting principle that requires expense incurred to generate revenue to be recorded at the same period with that revenue is

• a. Matching principle

• c. On - Going-concern principle.

QN=70 The following transactions, among others, occurred during August. Which transaction represented an expense during August

• d. Rent a space for office on account. The rental amount will be paid in the next 2 months.

• c. Paid $500 to a garage mechanic for automobile repair work performed in June