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WorksheetsAccounting Benchmark 1
Total questions: 88
Worksheet time: 44mins
A formal report that shows what an individual owns, what an individual owes, and the difference between the two is called:
Personal Net Worth
Net Worth Statement
Owner’s Equity
Financial Statement
The process of planning, recording, analyzing, and interpreting financial information is known as:
Accounting
GAAP
Business Ethics
Financial Reporting
The equation that shows the relationship among assets, liabilities, and owner’s equity is called:
Accounting Equation
Financial Equation
Equity Equation
Asset-Liability Equation
A business activity that changes assets, liabilities, or owner’s equity is known as a(n):
Accounting System
Business Transaction
Expense
Liability
A planned process for providing financial information that will be useful to management is called a(n):
Business Plan
Accounting System
Financial Statement
GAAP
The standards and rules that accountants follow while recording and reporting financial activities are referred to as:
Ethics
Business Ethics
GAAP (Generally Accepted Accounting Principles)
Accounting System
The account used to summarize the owner’s equity in the business is called:
Capital Account
Equity Account
Liability Account
Asset Account
The amount remaining after the value of all liabilities is subtracted from the value of all assets is called:
Net Income
Owner’s Equity
Net Worth
Capital
A record summarizing all the information pertaining to a single item in the accounting equation is called a(n):
Financial Statement
Business Transaction
Account
Ledger
The difference between personal assets and personal liabilities is referred to as:
Net Income
Personal Net Worth
Equity
Capital
Anything of value that is owned is referred to as a(n):
Asset
Liability
Equity
Expense
A sale for which cash will be received at a later date is known as:
Credit Sale
Accounts Payable
Deferred Revenue
Asset Sale
Assets taken out of a business for the owner’s personal use are referred to as:
Drawings
Expenses
Equity
Liability
A formal written document that describes the nature of a business and how it will operate is called a(n):
Business Ethics
Business Plan
Financial Statement
Capital Account
A business owned by one person is known as a(n):
Corporation
Partnership
Sole Proprietorship
Limited Liability Company
The use of ethics in making business decisions is referred to as:
Business Ethics
Corporate Responsibility
GAAP
Ethical Accounting
A business that performs an activity for a fee is called a(n):
Merchandising Business
Service Business
Manufacturing Business
Sole Proprietorship
The difference between assets and liabilities is referred to as:
Net Income
Owner’s Equity
Expense
Liability
Financial reports that summarize the financial conditions and operations of a business are known as:
Financial Statements
Accounting Records
Business Reports
Equity Statements
An amount owed by a business is called a(n):
Equity
Liability
Asset
Expense
A person or business to whom a liability is owed is referred to as a(n):
Creditor
Debtor
Investor
Equity Holder
A decrease in owner’s equity resulting from the operation of a business is called a(n):
Expense
Liability
Drawings
Loss
An increase in owner’s equity resulting from the operation of a business is called:
Profit
Revenue
Gain
Capital
The amount in an account is referred to as the:
Account Balance
Equity
Liability
Asset
The name given to an account is called the:
Account Title
Ledger Name
Account Name
Title Account
Financial rights to the assets of a business are called:
Liabilities
Equities
Owner's Equity
Assets
The principles of right and wrong that guide an individual in making decisions are referred to as:
Ethics
Business Ethics
GAAP
Personal Principles
The accounting equation is most often stated as:
Assets + Liabilities = Owner’s Equity
Assets - Liabilities = Owner’s Equity
Assets = Liabilities + Owner’s Equity
Assets + Owner’s Equity = Liabilities
After each transaction, the accounting equation must:
Be adjusted for profit and loss
Remain in balance
Increase in assets
Decrease in liabilities
A negative amount for net worth would reflect more debt than assets, which is:
Preferred by creditors
A sign of good financial health
Something a creditor would favor
A situation to avoid
When two asset accounts are changed in a transaction, there must be:
An increase in both accounts
A decrease in both accounts
An increase and a decrease
No change in the total
Detailed information about changes in owner’s equity is needed by:
Creditors to assess risk
Owners and managers to make sound business decisions
Customers to evaluate product prices
Government agencies for tax purposes
When items are bought and paid for at a future date, this transaction is referred to as:
A cash purchase
A deferred payment
A purchase on account
A credit sale
A transaction for the sale of goods or services results in:
An increase in owner’s equity
A decrease in owner’s equity
An increase in liabilities
No change in owner’s equity
Keeping separate financial records for a business and its owner’s personal belongings is an application of:
The Revenue Recognition principle
The Matching principle
The Business Entity concept
The Going Concern concept
An expense is defined as:
An increase in owner’s equity
A decrease in owner’s equity resulting from the operation of a business
An increase in liabilities
A decrease in assets
Business ethics are best described as:
The principles of right and wrong that guide an individual in making decisions
The financial standards set by regulatory bodies
The rules for financial reporting
The strategies used to increase profits
Payments for advertising, equipment repairs, utilities, and rent are considered:
Assets
Liabilities
Expenses
Withdrawals
Withdrawals are best described as:
Assets taken out of a business for the owner’s personal use
Payments made to creditors
Investments in the business
Expenses incurred by the business
The most common type of withdrawal by an owner from a business is:
Withdrawal of inventory
Withdrawal of cash
Withdrawal of equipment
Withdrawal of receivables
When an owner withdraws cash from the business, the transaction affects:
Only assets
Only liabilities
Both assets and owner’s equity
Both liabilities and owner’s equity
A withdrawal is classified as:
An expense
A liability
A reduction in capital
An asset
Received cash from the owner as an investment, $10,000.00. What is the effect on the accounts?
Cash (+$10,000), Owner’s Equity (+$10,000)
Cash (+$10,000), Accounts Payable (+$10,000)
Owner’s Equity (+$10,000), Supplies (+$10,000)
Cash (+$10,000), Supplies (-$10,000)
Paid cash for insurance, $3,000.00. What is the effect on the accounts?
Cash (-$3,000), Insurance (+$3,000)
Cash (+$3,000), Insurance (+$3,000)
Cash (-$3,000), Owner’s Equity (-$3,000)
Cash (-$3,000), Accounts Payable (+$3,000)
Bought supplies on account from Conrad Supplies, $1,500.00. What is the effect on the accounts?
Supplies (+$1,500), Cash (-$1,500)
Supplies (+$1,500), Accounts Payable (+$1,500)
Supplies (+$1,500), Owner’s Equity (+$1,500)
Supplies (+$1,500), Accounts Payable (-$1,500)
Paid cash on account to Conrad Supplies, $1,000.00. What is the effect on the accounts?
Cash (-$1,000), Supplies (+$1,000)
Cash (-$1,000), Accounts Payable (-$1,000)
Cash (-$1,000), Owner’s Equity (-$1,000)
Cash (-$1,000), Supplies (-$1,000)
Received cash from sales, $2,700.00. What is the effect on the accounts?
Cash (+$2,700), Supplies (+$2,700)
Cash (+$2,700), Accounts Payable (+$2,700)
Cash (+$2,700), Owner’s Equity (+$2,700)
Cash (+$2,700), Insurance (-$2,700)
Sold services on account to Ashley Computers, $3,300.00. What is the effect on the accounts?
Accounts Receivable (+$3,300), Owner’s Equity (+$3,300)
Cash (+$3,300), Supplies (-$3,300)
Accounts Receivable (+$3,300), Accounts Payable (+$3,300)
Accounts Receivable (+$3,300), Owner’s Equity (-$3,300)
Paid cash for supplies, $850.00. What is the effect on the accounts?
Cash (-$850), Supplies (+$850)
Cash (-$850), Accounts Payable (+$850)
Cash (-$850), Owner’s Equity (-$850)
Cash (-$850), Supplies (-$850)
Paid cash for rent, $1,000.00. What is the effect on the accounts?
Cash (-$1,000), Rent Expense (+$1,000)
Cash (-$1,000), Owner’s Equity (+$1,000)
Cash (-$1,000), Accounts Payable (+$1,000)
Cash (-$1,000), Rent Expense (-$1,000)
Paid cash to owner for personal use, $1,200.00. What is the effect on the accounts?
Cash (-$1,200), Owner’s Equity (-$1,200)
Cash (-$1,200), Supplies (+$1,200)
Cash (-$1,200), Accounts Payable (-$1,200)
Cash (-$1,200), Owner’s Equity (+$1,200)
Paid cash for the telephone bill, $150.00. What is the effect on the accounts?
Cash (-$150), Telephone Expense (+$150)
Cash (-$150), Owner’s Equity (-$150)
Cash (-$150), Accounts Receivable (+$150)
Cash (-$150), Telephone Expense (-$150)
Received cash on account from Ashley Computers, $2,000.00. What is the effect on the accounts?
Cash (+$2,000), Accounts Receivable (-$2,000)
Cash (+$2,000), Owner’s Equity (+$2,000)
Cash (+$2,000), Accounts Payable (-$2,000)
Cash (+$2,000), Supplies (+$2,000)
An accounting device used to analyze transactions is known as:
Ledger
Journal
T account
Balance sheet
An amount recorded on the left side of an account is called a:
Credit
Equity
Debit
Asset
An amount recorded on the right side of an account is called a:
Debit
Liability
Credit
Expense
The side of the account that is increased is referred to as the:
Debit side
Credit side
Asset side
Balance side
A list of accounts used by a business is known as a:
Balance sheet
Income statement
Chart of accounts
Ledger
Amounts to be paid in the future for goods or services already acquired are known as:
Accounts Receivable
Accounts Payable
Prepaid Expenses
Accrued Revenues
Amounts to be received in the future due to the sale of goods or services are called:
Notes Payable
Deferred Revenue
Accounts Receivable
Accrued Expenses
Which accounts are affected when cash is received from the owner as an investment?
Cash (Debit), Sales (Credit)
Cash (Debit), N. Lee, Capital (Credit)
Cash (Credit), N. Lee, Drawing (Debit)
Cash (Credit), Advertising Expense (Debit)
Which accounts are affected when cash is paid for supplies?
Cash (Debit), Supplies (Credit)
Cash (Credit), Supplies (Debit)
Cash (Debit), Accts. Rec.—Parkview Company (Credit)
Cash (Credit), Accts. Pay.—City Supplies (Debit)
Which accounts are affected when cash is paid for insurance?
Cash (Debit), Prepaid Insurance (Credit)
Cash (Credit), Prepaid Insurance (Debit)
Cash (Debit), N. Lee, Capital (Credit)
Cash (Credit), N. Lee, Drawing (Debit)
Which accounts are affected when supplies are bought on account from City Supplies?
Supplies (Debit), Accts. Pay.—City Supplies (Credit)
Supplies (Credit), Accts. Rec.—Parkview Company (Debit)
Supplies (Debit), N. Lee, Capital (Credit)
Supplies (Credit), Cash (Debit)
Which accounts are affected when cash is paid on account to City Supplies?
Cash (Debit), Accts. Pay.—City Supplies (Credit)
Cash (Credit), Accts. Pay.—City Supplies (Debit)
Cash (Debit), N. Lee, Capital (Debit)
Cash (Debit), Supplies (Credit)
Which accounts are affected when cash is received from sales?
Cash (Debit), Sales (Credit)
Cash (Credit), Sales (Debit)
Cash (Debit), N. Lee, Capital (Credit)
Cash (Credit), N. Lee, Drawing (Debit)
Which accounts are affected when services are sold on account to Parkview Company?
Accts. Rec.—Parkview Company (Debit), Sales (Credit)
Accts. Rec.—Parkview Company (Credit), Sales (Debit)
Accts. Rec.—Parkview Company (Debit), N. Lee, Capital (Credit)
Accts. Rec.—Parkview Company (Credit), Cash (Debit)
Which accounts are affected when cash is paid for advertising?
Cash (Debit), Advertising Expense (Credit)
Cash (Credit), Advertising Expense (Debit)
Cash (Debit), N. Lee, Drawing (Credit)
Cash (Credit), Sales (Debit)
Which accounts are affected when cash is received on account from Parkview Company?
Cash (Debit), Accts. Rec.—Parkview Company (Credit)
Cash (Credit), Accts. Rec.—Parkview Company (Debit)
Cash (Debit), Sales (Credit)
Cash (Credit), Supplies (Debit)
Which accounts are affected when cash is paid to the owner for personal use?
Cash (Debit), N. Lee, Capital (Credit)
Cash (Credit), N. Lee, Drawing (Debit)
Cash (Debit), Sales (Credit)
Cash (Credit), Advertising Expense (Debit)
Which regulatory body is responsible for setting accounting standards in the United States?
International Accounting Standards Board (IASB)
Financial Accounting Standards Board (FASB)
Securities and Exchange Commission (SEC)
American Institute of CPAs (AICPA)
What does GAAP stand for?
Generally Accepted Auditing Practices
Generally Accepted Accounting Principles
General Accounting and Auditing Procedures
General Auditing and Accounting Policies
Which organization issues the International Financial Reporting Standards (IFRS)?
SEC
FASB
IASB
AICPA
Which section of the Sarbanes-Oxley Act requires the CEO and CFO to certify the accuracy of financial reports?
Section 201
Section 302
Section 404
Section 806
What is the main purpose of Section 404 of the Sarbanes-Oxley Act?
To establish penalties for securities fraud
To enhance financial disclosures and prevent accounting fraud
To require internal control reports and assessments
To protect whistleblowers
The Sarbanes-Oxley Act was enacted in response to which major corporate scandal?
WorldCom
Tyco International
Enron
Arthur Andersen
What is the primary mission of the SEC?
To set accounting standards
To regulate the stock market and protect investors
To conduct audits of public companies
To issue tax guidelines
Which of the following is NOT a function of the SEC?
Enforcing securities laws
Issuing accounting standards
Overseeing securities exchanges
Regulating corporate financial disclosures
The SEC requires public companies to file periodic financial reports. Which of the following is one of these required reports?
Form 10-K
Form 1099
Form W-2
Form 1040
Which technology is increasingly being used in accounting for automating processes and improving accuracy?
Blockchain
Quantum computing
Virtual reality
3D printing
What does ESG stand for in the context of accounting and reporting?
Economic, Social, and Governance
Environmental, Social, and Governance
Ethical, Sustainable, and Governance
Environmental, Sustainable, and Growth
How does globalization impact accounting standards?
It reduces the need for consistent standards
It creates a demand for international harmonization of standards
It limits the scope of accounting practices
It has no impact on accounting standards
Which principle is NOT part of the AICPA Code of Professional Conduct?
Integrity
Objectivity
Confidentiality
Profitability
What should an accountant do if they encounter a conflict of interest?
Ignore it and proceed with their work
Disclose the conflict to relevant parties and seek guidance
Take advantage of the situation for personal gain
Resign from their position immediately
Which of the following is an example of an ethical dilemma in accounting?
Accurately reporting financial data
Manipulating financial statements to meet targets
Following company policies and procedures
Conducting regular audits and reviews
How do businesses use financial statements in decision-making?
To allocate resources effectively
To entertain clients
To design marketing materials
To develop new products
Which financial statement provides information about a company's financial position at a specific point in time?
Income Statement
Statement of Cash Flows
Balance Sheet
Statement of Retained Earnings
Why is accounting information important for personal financial planning?
It helps in budgeting and managing expenses
It is required for paying taxes
It is used to apply for loans
It is needed for purchasing insurance
