Accounting Quiz

If Tim Jones, the owner of Jones Hardware proprietorship, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to:

• Debit Tim Jones. Salary and credit Cash.

• Debit Salary Expense and credit Cash.

• Debit Cash and credit Tim Jones. Withdrawals.

• Debit Tim Jones, Withdrawals and credit Cash.

• Debit Automobiles and credit Cash.

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have?

• Increased $22,000.

• Decreased $156,000

• Decreased $22,000.

• Increased $156,000

• Increased $89,000

Under the accrual basis of accounting, expenses are reported in the accounting period when the?

• Contracts have been signed

• Expense incurred

• Trading negotiation has been done

• None of these

• Cash is paid for purchasing

The accounting principle that requires accounting information to be based on actual cost instead of current value, is the?

• On - Going-concer principle

• Accounting equation.

• Cost principle.

• Accrual principle

• Consistency principle

Which is true about Expenses:

• The costs of assets or services used to generate revenue.

• Resources owned or controlled by a company.

• The same as net income

• The excess of expenses over assets.

• Company's eoming activities that contribute to increase owner's equity.

On June 1, $800 of goods are sold with credit terms of 1/10, n/30. How much would the seller receive if the buyer pays on June 8?

• 790

• 792

• 232

• 240

• 800

The inventory system that updates the accounting records for merchandise transactions only at the end of a period. This statement is about:

• LIFO inventory system

• Weighted inventory system

• FIFO inventory system

• Periodic inventory system

• Perpetual inventory system

During the month of February, Hoffer Company had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the February 01 beginning cash balance?

• $1,100.

• $4,300.

• $700.

• $0.

• $2,900.

Which accounts used to record amounts owed to suppliers for products of services purchased on credit?

• Unearned revenue

• Trade accounts payable

• Prepayment

• Trade account receivable

• Revenue

The financial statement that reports whether the business earned a profit and also lists the types and amounts

• A Statement of financial position.

• A Statement of cash flows.

• An Income statement.

• A Statement of owner's equity.

• A Balance sheet.