Untitled Quiz

Indicate whether the following statements are True (T) or False (F). 1. The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

• True

• False

Indicate whether the following statements are True (T) or False (F). 2. As a general rule, revenues should not be recognized in the accounting records when earned, but rather when cash is received.

• True

• False

Indicate whether the following statements are True (T) or False (F). 3. The going-concern assumption presumes that a business will continue operating instead of being closed or sold.

• True

• False

Indicate whether the following statements are True (T) or False (F). 4. Revenues are increases in equity (via net income) from a company's sales of products and services to customers.

• True

• False

Indicate whether the following statements are True (T) or False (F). 5. The accounting equation implies that: Assets + Liabilities = Equity.

• True

• False

Indicate whether the following statements are True (T) or False (F). 6. Business transactions and events are the starting points of financial statements.

• True

• False

Indicate whether the following statements are True (T) or False (F). 7. Source documents identify and describe transactions and events entering the accounting process.

• True

• False

Indicate whether the following statements are True (T) or False (F). 8. An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

• True

• False

Indicate whether the following statements are True (T) or False (F). 9. Unearned revenue is a liability that is settled in the future when a company delivers its products or services.

• True

• False

Indicate whether the following statements are True (T) or False (F). 10. The right side of an account is called the debit side.

• True

• False