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WorksheetsPOB Unit 6 Test Review
Total questions: 25
Worksheet time: 13mins
When businesses invest funds to expand, they are involved in the
process of:
finance
accounting
selling
capitalism
Assets a company already owns and can use to finance a new venture are
accounts payable
return on capital
equity
dividends
What is one of the main reasons why businesses need to keep accurate accounting records?
to control expenses
to follow procedures
to regulate taxes
to eliminate risks
The role of finance in business often involves:
paying employees
monitoring expenses
buying supplies
obtaining funds
Businesses would not be able to determine if they are meeting their financial goals without accurate:
marketing plans
production plans
distribution plans
accounting systems
Businesses use the information collected through the accounting process to prepare accurate:
promissory notes
balance sheets
purchase orders
inventory forms
An accounting method in which income and expenditures are recorded at the time the money changes hands
tax accounting
cash accounting
cost accounting
accrual accounting
______ accounting is used to determine a price for a product or service that will allow earnings of a reasonable profit.
accrual
cash
cost
tax
A type of accounting that involves preparing and reporting financial data to internal users, usually managers, who need financial information to control day-to-day operations and to make financial decisions and plans affecting business
managerial
cash
accrual
financial
For an accounting system to be useful to the business, the accounting information it contains must be:
accurate and up to date
approved by the CEO
recorded using the accrual method
posted by an accountant
Also known as stockholders' (or shareholders') equity, book value, and net worth
liabilities
assets
income
equity
Why are accurate accounting records important to a business?
They prevent any financial losses
They increase the return on investments
They show the business how it is doing
They give the business an image of success
The foundation for accounting; represents the relationship between assets, liabilities, and owners' equity, is known as the:
worth
accounting equation
income statement
balance sheet
What accounting record would summarize a business's profit or loss for a previous year?
Balance sheets
statement of owner's equity
income statement
statement of cash flow
A creditor is most likely to examine a business's financial accounting records if the business is:
applying for a bank loan
complying with regulations
selecting a new market
buying the employees lunch
An accounting device used to analyze transactions is called:
T account
transaction
accounting equation
accounting system
Which of the following is an asset?
bank loans
capital
rent payable
cash
Which of the following is a liability?
rent payable
cash
rent receivable
ledgers
The formula for the accounting equation is:
Assets = Liabilities - Owners' Equity
Assets + Liabilities + Owners' Equity
Assets + Liabilities = Owners' Equity
Assets = Liabilities + Owners' Equity
A business has $57,500 in liabilities and $20,000 in owners' equity, how much are there in assets?
$35,500
$7,500
$77,500
$82,500
What is the gross profit on sales for the income statement ?
Net Sales $1,600,000
Cost of Goods Sold $900,000
Total Assets $1,500,000
Total Liabilities $1,400,000
Current Liabilities $62,000
Total Expenses $500,000
$1,000,000
$2,500,000
$700,000
$3,100,000
Which of the following groups makes regular use of a business's managerial accounting information:
customers
investors
managers
creditors
Which of the following is a requirement for a good accounting system:
it should eliminate the need for an accountant
it should provide needed info quickly
it should be updated manually
it should be replaced every 2 or 3 years
On an Income Statement if the Total Expenses were greater than the Cost of Goods Sold the outcome would be a:
net loss
net profit
revenue
net gain
A bank denies a business owner's application for credit saying, "We feel that you would be un-able to make the monthly payments because of your other debts." What financial report di the bank review?
statement of shareholder's equity
income statement
statement of cash flows
balance sheet
