Dry Run

What is the primary purpose of accounting?

• To compute taxes

• To provide financial information

• To determine product cost

• To prepare payroll

Which is not an external user of accounting information?

• Investors

• Creditors

• Managers

• Government

What financial statement shows the financial position of a business?

• Income Statement

• Cash Flow Statement

• Balance Sheet

• Owner's Equity Statement

Which form of business is owned by two or more persons?

• Sole Proprietorship

• Partnership

• Corporation

• Cooperative

Which account increases with a credit?

• Cash

• Accounts Receivable

• Owner's Capital

• Rent Expense

Accounting is referred to as the ______ of business.

• Mind

• Backbone

• Brain

• Language

What is the rule of debit and credit for liabilities?

• Debit increases, Credit decreases

• Debit decreases, Credit increases

• Debit increases, Credit increases

• Both decrease

A trial balance is prepared to:

• Determine net income

• Prepare cash flows

• Test equality of debits and credits

• File taxes

Which branch of accounting focuses on internal reports?

• Financial

• Auditing

• Management

• Tax

What document is used to record initial business transactions?

• Ledger

• Journal

• Financial Statement

• Invoice