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WorksheetsIntroduction to Accounting and Business
Total questions: 25
Worksheet time: 10mins
True or False
The main objective of a not-for-profit business is not to make profit.
(a)
True or False
A corporation is a business that is legally separate and distinct from its owners.
(a)
True or False
The role of accounting is to provide many different users with financial information to make economic decisions.
(a)
True or False
An account receivable is typically classified as a revenue.
(a)
True or False
The cost concept is the basis for entering the exchange price into the accounting records.
(a)
True or False
The cost concept is the basis for entering the exchange price into the accounting records.
(a)
True or False
The owner's rights to the assets rank ahead of the creditors' right to the assets.
(a)
True or False
Paying an account payable increases liabilities and decreases assets.
(a)
True or False
Receiving payments on an account receivable increases both equity and assets.
(a)
True or False
Cash withdrawals by owners decrease assets and increase equity.
(a)
True or False
Purchasing supplies on account increases liabilities and decreases equity.
(a)
True or False
Revenue is earned only when money is received.
(a)
True or False
Expenses are assets that are used up during the process of earning revenue.
(a)
True or False
An income statement is a summery of the revenues and expenses of a business as of a specific date .
(a)
True or False
A statement of owner's equity reports the changes in the owner's equity for a period of time.
(a)
True or False
The statement of cash flows consists of three sections: cash flow from operating activities, cash from income activities, and cash flows from equity activities.
(a)
Which of the items below is not a business entity?
entrepreneurship
proprietorship
partnership
corporation
All of the following are general-purpose financial statements except:
balance sheet
income statement
statement of owner's equity
cash budget
The initials of GAAP stand for
Generally Accounting Procedures
Generally Accepted Plans
Generally Accepted Accounting Principles
Generally Accepted Accounting Practices
Which of the following concepts relates to separating the reporting of business and personal economic transactions?
Cost Concept
Unit of Measure Concept
Business Entity Concept
Objectivity Concept
Which of the following is not a business transaction?
make a sales offer
sell goods for cash
receive cash for services to be rendered later
pay for supplies
The asset created by a business when it makes a purchase on account is referred to as an
accounts payable
prepaid expense
unearned revenue
accounts receivable
How does paying a liability in cash affect the accounting equation?
assets increase; liabilities decrease
assets increase; liabilities increase
assets decrease; liabilities decrease
liabilities decrease; owner's equity decreases
How does receiving a bill to be paid next month for services rendered affect the accounting equation?
assets decrease; owner's equity decreases
assets increase; liabilities increase
liabilities increase; owner's equity increases
liabilities increase; owner's equity decreases
How does the purchase of equipment by signing a note affect the accounting equation?
assets increase; assets decrease
assets increase; liabilities decrease
assets increase; liabilities increase
assets increase; owner's equity increases
