accounting finals

1. (a)   is used to record small business expense?

What is the purpose of the balance sheet in accounting?

• 1. to depict the financial position of a company at specific point in time

• to show revenues and expenses

• to calculate net income

• to record of daily transactions

what is net profit?

• revenue minus expenses

• revenue plus expenses

• revenue divided by expenses

• expenses minus revenue

Which financial ratio measure a company’s ability to generate profit from its share holder’s  equity?

• Debt to equity ratio

• Return on assets(ROA)

• Return on Equity (ROE)

• gross profit margin

if asset 50,000, liabilities 10,000 what is the owners equity?

• 20,000

• 60,000

• 40,000

• 50,000

What is the purpose of trial balance?

• to determine the financial position of a company

• 1. to identify errors in the financial statements

• to prepare the balance sheet

• to calculate the net income

Which of the following financial statements is prepared as of specific date?

• cash flow statement

• income statement

• none

• 1. Statement of the financial position

Capital and retained earnings falls under which account?

• liabilities

• 1. Owner’s equity

• asset

• none

A credit is an

• • It represents an increase in liabilities & decrease in assets or expenses 

• • It represents an increase in equity or revenue

  
  

• • Entry made on the right side of general ledger account 

• All of the above

Which side of the accounting equation does entry affect?

• 1. left side 

• right side

• both side equally

• none of the above