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Accounting I Final Exam Review

Total questions: 200

Worksheet time: 2hrs 26mins

Name
Class
Date
1.
Transferring information from a journal entry to a ledger account is called
a)
journalizing.
b)
posting.
c)

referencing.

d)
accounting.
2.
A financial statement showing the revenue and expenses for a fiscal period is called an income statement.
a)
True
b)
False
3.
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period that are transferred to a journal are called
a)

business entries.

b)
closing entries.
c)
payroll entries.
d)
adjusting entries.
4.
A ledger that is summarized in a single general ledger account is called a
a)
subsidiary ledger.
b)
secondary ledger.
c)

asset ledger.

d)
corporate ledger.
5.
A decrease in owner's equity resulting from the operation of the business is a(n)
a)
withdrawal.
b)
sales.
c)
expense.
d)
investment.
6.
Journal entries used to prepare temporary accounts for the new fiscal period are called
a)
adjusting entries.
b)
closing entries.
c)
fiscal entries.
d)
temporary entries.
7.
A business that purchases and sell goods is called a(n)
a)
service business.
b)
manufacturing business.
c)

mixed-media business.

d)
merchandising business.
8.
A business paper from which information is obtained for a journal entry is called a(n)
a)
ledger.
b)
work sheet.
c)
source document.
d)

income statement.

9.
A financial statement that reports assets, liabilities, and equity on a specific date is called a(n)
a)
work sheet.
b)
income statement.
c)
balance sheet.
d)
statement of owner's equity.
10.
Accounts payable is an example of a(n)
a)
asset account.
b)
liability account.
c)
equity account.
11.
When a business pays cash on account, a liability account is
a)
increased by a debit.
b)
increased by a credit.
c)
decreased by a debit.
d)
decreased by a credit.
12.
Capital is an example of a(n)
a)
asset account.
b)
liability account.
c)
equity account.
13.
Transactions are recorded in a journal in
a)
alphabetical order.
b)
chronological order.
c)
order of importance.
d)
amounts from least to greatest.
14.
The accounting equation is
a)
asset - liabilities = equity
b)
assets + liabilities = equity
c)
assets = liabilities + equity
d)
assets = liabilities - equity
15.
A business that performs a service for a fee is called a merchandising business.
a)
True
b)
False
16.

The difference between total revenue and total expenses when total expenses is greater is called

a)
net loss.
b)
net income.
c)
gross income.
d)
profit.
17.
Corporate earning distributed to stockholders are called
a)
refunds.
b)

capital stock.

c)
dividends.
d)
stock options.
18.
Cash is always proved at the end of the month.
a)
True
b)
False
19.
A business activity that changes accounts in the accounting equation is called a(n)
a)
deal.
b)

agreement.

c)
transaction.
d)
business exchange.
20.

A transaction changes the balance of two accounts on the same side of the accounting equation. If one of the account balances increases, the other account balance

a)
must also increase.
b)
must be decreased.
c)
may stay the same.
d)
is moved to the other side of the equation.
21.
A group of accounts is called a(n)
a)
ledger.
b)
journal.
c)
account summary.
d)
chart of accounts.
22.
When a business pays cash for supplies,
a)
accounts payable increases.
b)
cash increases.
c)
owner's equity increases.
d)
supplies increases.
23.
A business receives cash on account. How is this transaction recorded?
a)
Debit cash, credit accounts receivable
b)
Debit cash, credit accounts payable
c)
Credit cash, debit accounts receivable
d)
Credit cash, debit accounts payable
24.
Every transaction must affect both sides of the account equation.
a)
True
b)
False
25.

If total assets are $20,000 and total liabilities are $5,000, total owner's equity is

a)
$25,000
b)

$15,000

c)
$5,000
d)
There's no way to know based on the information provided.
26.

Every transaction must affect at least three accounts.

a)
True
b)
False
27.
Only general ledger accounts with balances are included on a post-closing trial balance.
a)
True
b)
False
28.

A transaction for the sale of goods or services results in a increase in owner's equity.

a)
True
b)
False
29.
Detailed information about changes in owner's equity is needed by owners and managers to make sound business decisions.
a)
True
b)
False
30.

When an owner withdraws cash from the business, the transaction affects both liabilities and owner's equity.

a)
True
b)
False
31.
When items are bought and paid for at a future date, another way to state this is to say that these items are bought on account.
a)
True
b)
False
32.
Only the column totals for special amount columns in a journal are posted.
a)
True
b)
False
33.
When an owner invests cash in a business, the owner's capital account is
a)
increased by a debit.
b)
increased by a credit.
c)
decreased by a debit.
d)
decreased by a credit.
34.

The current owner's capital amount reported on a statement of owner's equity is calculated as capital account balance less drawing account balance plus net income.

a)
True
b)
False
35.
A form describing the goods or services sold, the quantity, the price, and the terms of sale is called a(n)
a)
check.
b)
receipt.
c)
invoice.
d)
memorandum.
36.
The source document used when supplies are bought on account is a check.
a)
True
b)
False
37.
Which special amount column is NOT used in a five column journal.
a)
sales debit
b)
sales credit
c)
cash debit
d)
cash credit
38.
The normal account balance of Sales Returns and Allowances is a credit.
a)
True
b)
False
39.
Withdrawals are assets that the owner takes out of a business which
a)
decrease the amount of owner's equity.
b)
increase the amount of owner's equity.
c)
decrease revenue.
d)
increase expenses.
40.
The statement of owner's equity reports information for a period of time.
a)
True
b)
False
41.
If you are proving a journal page in the middle of the month because the page is full, what will you write in the "account title" section on the last line of that journal page?
a)
Totals
b)
Brought Forward
c)
Carried Forward
d)
Monthly Balance
42.
The normal balance of a liability account is on the debit side.
a)
True
b)
False
43.
The first digit in the account number 520 means the account is in the
a)
expense division of the general ledger.
b)
revenue division of the general ledger.
c)
liability division of the general ledger.
d)
asset division of the general ledger.
44.
The first account in the assets section of a general ledger is always
a)
supplies
b)
prepaid insurance
c)
capital
d)
cash
45.
The last step in the posting procedure is to write the
a)
entry date in the Date column of the account.
b)
journal page number in the Post Ref column of the account.
c)
account number in the Post Ref column of the journal.
d)
entry amount in the Debit or Credit column of the account.
46.

A check mark in parentheses below a General Debit column total indicates that the total was posted to the general debit account..

a)
True
b)
False
47.
The amount of sales tax collected is a liability of a business until paid to the government.
a)
True
b)
False
48.
Supplies is an example of a(n)
a)
asset account.
b)
liability account.
c)
equity account.
49.
The income statement and the balance sheet are prepared from the Trial Balance columns of the work sheet.
a)
True
b)
False
50.
Cash Short and Over is classified as (n)
a)
asset.
b)
liability.
c)
expense.
d)
equity.
51.
An endorsement on the back of a check consisting of the words "Pay to the order of" and a new check owner's name is a
a)
blank endorsement.
b)
special endorsement.
c)
restrictive endorsement.
d)
qualified endorsement.
52.
The petty cash fund is a liability with a normal debit balance.
a)
True
b)
False
53.
A check that has been paid by the bank is called a
a)
voided check.
b)
dishonored check.
c)
postdated check.
d)
canceled check.
54.

A deduction that a vendor allows on the invoice amount to encourage prompt payment is called a cash discount.

a)
True
b)
False
55.
A petty cash fund is replenished
a)
daily.
b)
weekly.
c)
monthly.
d)
yearly.
56.

If the beginning balance of Supplies was $3,000 and the ending balance was $1,300, what is the amount of the adjusting entry to Supplies Expense for the period?

a)

$1,700

b)

$3,000

c)

$1,300

d)

$4,300

57.
The recording of debit and credit parts of the transaction together is called double-entry accounting.
a)
True
b)
False
58.
The length of time for which a business summarizes financial information and reports its financial performance is called a(n)
a)
accounting period.
b)
worksheet period.
c)
fiscal period.
d)
income period.
59.

The amount recorded on the right side of a T-account is called the credit.

a)
True
b)
False
60.
Net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total.
a)
True
b)
False
61.
Information needed to prepare a balance sheet's Assets section is obtained from a work sheet's Account Title column and
a)
Income Statement Debit column.
b)
Income Statement Credit column.
c)
Balance Sheet Debit column.
d)
Balance Sheet Credit column.
62.
The formula for calculating the net income ratio on an income statement is
a)
net income divided by total sales.
b)
total sales divided by total expenses.
c)
total sales divided by net income.
d)
total sales minus total expenses divided by net income.
63.
A balance sheet reports financial information for a specific date.
a)
True
b)
False
64.
The accounts that appear on the post-closing trial balance are
a)
assets, liabilities, and owner's capital.
b)
revenue, expenses, and owner's drawing.
c)
all accounts in the chart of accounts.
d)
all temporary accounts.
65.

The supplies account has a normal balance on the credit side.

a)
True
b)
False
66.
Income summary is a(n)
a)
asset account.
b)
liability account.
c)
temporary account.
d)
permanent account.
67.
A fiscal period must be 12 months in length.
a)
True
b)
False
68.
Accounts used to accumulate information from one fiscal period to the next are
a)
revenue accounts.
b)
permanent accounts.
c)
temporary accounts.
d)
expense accounts.
69.
After the closing entries are posted, the balance in the owner's drawing account should be
a)
a debit.
b)
a credit.
c)
zero.
70.

Journal entries used to prepare temporary accounts for a new fiscal period are adjusting entries.

a)
True
b)
False
71.
Supplies bought for use in a business are recorded in the
a)
Supplies Expense account.
b)
Supplies account.
c)
Purchases account.
d)
Merchandise Inventory account.
72.
The total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable, in the general ledger.
a)
True
b)
False
73.
The terms of a sale of 1/10, n/30 means that 1/10 or 10% of the invoice amount may be deducted if paid within 30 days.
a)
True
b)
False
74.

A transaction for paying cash for rent would be recorded in which journal?

a)
purchases journal
b)
sales journal
c)
cash payments journal
d)
cash receipts journal
75.

Repair Expense is increased with a debit.

a)
True
b)
False
76.
A transaction for purchasing merchandise on account would be recorded in which journal?
a)
purchases journal
b)
sales journal
c)
cash payments journal
d)
cash receipts journal
77.
A sole proprietorship is owned by many people.
a)
True
b)
False
78.

A journal used to record only one kind of transaction is called a special journal.

a)
True
b)
False
79.
Insurance Expense is a temporary account.
a)
True
b)
False
80.

For a sale on account of $800 plus sales tax of $64, the amount recorded in the Accounts Receivable amount column of the sales journal is

a)

$864

b)

$800

c)

$736

d)

$64

81.
The amount of sales tax in a sale is calculated as the price of goods
a)
plus the sales tax rate.
b)
times the sales tax rate.
c)
minus the sales tax rate.
d)
divided by the sale tax rate.
82.
A transaction for cash and credit card sales would be recorded in the
a)
purchases journal.
b)
sales journal.
c)
cash receipts journal.
d)
cash payments journal.
83.
A transaction for a sale of merchandise on account would be recorded in the
a)
purchases journal.
b)
sales journal.
c)
cash receipts journal.
d)
cash payments journal.
84.
Payments for advertising, equipment repairs, utilities, and rent are liabilities.
a)
True
b)
False
85.
A columnar accounting form used to summarize general ledger information needed to prepare financial statements is called a(n)
a)
work sheet.
b)
balance sheet.
c)
income statement.
d)
journal.
86.
A transaction for the purchase of supplies on account would be recorded in the
a)
sales journal.
b)
cash payments journal.
c)
purchases journal.
d)
general journal.
87.
A transaction for the payment of dividends would be recorded in the
a)
general journal.
b)
cash payments journal.
c)
cash receipts journal.
d)
sales journal.
88.
A transaction for returned merchandise would be recorded in the
a)
purchases journal.
b)
sales journal.
c)
general journal.
d)
cash payments journal.
89.
An entry in the general journal that affects Accounts Payable also affects a vendor's account in the accounts payable subsidiary ledger.
a)
True
b)
False
90.
Employee's regular earnings are calculated as
a)
regular hours time regular rate.
b)
regular hours divided by regular rate.
c)
total hours plus overtime rate.
d)
overtime hours minus overtime rate.
91.
A business form used to record details affecting payments made to an employee is a(n)
a)
employee earning record.
b)
payroll journal.
c)
employee accounts payable record.
d)
tax withholding form.
92.
The total earnings paid to an employee after payroll taxes and other deductions is recorded in the payroll register's
a)
Gross Pay column.
b)
Total Earnings column.
c)
Net Pay column.
d)
Total Deductions column.
93.
Total earnings are sometimes referred to as net pay.
a)
True
b)
False
94.

Office supplies is a temporary account.

a)
True
b)
False
95.
Payroll taxes withheld represent an asset for an employer until payment is made.
a)
True
b)
False
96.
The source document for paying employee income tax, social security tax, and Medicare tax is
a)
a check.
b)
a receipt.
c)
a memorandum.
d)
an invoice.
97.
Employer payroll taxes are business expenses.
a)
True
b)
False
98.
An accounts receivable that cannot be collected is called a(n)
a)
voided account.
b)
bankrupt account.
c)
uncollectible account.
d)
income summary account.
99.

Increases to accounts are always recorded on the normal balance side.

a)
True
b)
False
100.
Accounts receivable is an example of which type of account?
a)
asset
b)
liability
c)
expense
d)
revenue
101.

What is accounting?

a)

A system of gathering financial information about a business and reporting this information to users.

b)

Looking at events that have taken place and thinking about how they will affect the business.

c)

Deciding the meaning and importance of the information in various reports.

d)

Telling the results.

102.

What are forms and papers that provide information about a business transaction called?

a)

ledgers.

b)

accounts.

c)

journals.

d)

source documents.

103.

What provides a chronological record of financial transactions expressed as debits and credits to accounts?

a)

journal.

b)

trial balance.

c)

balance sheet.

d)

ledger.

104.

What is the position of a debit entry in a T account?

a)

Increases liabilities.

b)

Increases owner's equity.

c)

Is on the left side.

d)

Decreases assets.

105.

Increases are entered on the credit side of a(n)

a)

Liability account

b)

Drawing account

c)

Expense account

d)

Asset account

106.

What term is used to describe an accounting period of twelve months' duration?

a)

Fiscal year

b)

Operational year

c)

Physical year

d)

Calendar year

107.

What is the financial statement called that shows the state of the firm's assets, liabilities, and owner's equity on a specific date?

a)

Balance sheet

b)

Statement of operations

c)

Income statement

d)

Statement of financial position

108.
Assets taken out of a business for the owner's personal use
a)
capital
b)
withdrawals
c)
equities
d)
revenue
109.
Planning, recording, analyzing, and interpreting financial information
a)
accounting
b)
ethics
c)
transaction
d)
revenue
110.
A decrease in owner's equity resulting from the operation of a business
a)
account
b)
capital
c)
asset
d)
expense
111.
Amount owed by a business
a)
liability
b)
asset
c)
capital
d)
account
112.
A business activity that changes assets, liabilities, or owner's equity
a)
transaction
b)
expense
c)
revenue
d)
sale on account
113.
Anything of value that is owned
a)
account
b)
asset
c)
withdrawal
d)
expense
114.
A business owned by one person
a)
service business
b)
revenue
c)
expense
d)
proprietorship
115.
The amount in an account
a)
account title
b)
revenue
c)
account balance
d)
accounting records
116.
Financial reports that summarize the financial condition and operations of a business
a)
financial statements
b)
ethics
c)
withdrawals
d)
equities
117.
An increase in owner's equity resulting from the operation of a business
a)
asset
b)
expense
c)
withdrawl
d)
revenue
118.
Accounting entries involve a minimum of how many accounts?
a)
0
b)
1
c)
2
d)
3
119.

________ are debts of the business?

a)

assets

b)

liabilities

c)

owners equity

d)

vehicles

120.

A planned process designed to compile financial data and summarize the results in accounting records and reports is known as (a/an) _.

a)

Net worth statement

b)

Accounting system

c)

Financial Statements

d)

Personal net worth

121.

A formal report that shows what an individual owns, what an individual owes, and the difference between the two.

a)

Net worth statement

b)

Net worth system

c)

Net worth liability

d)

Personal net worth

122.

The difference between personal assets and personal liabilities is called _.

a)

personal net worth

b)

business net work

c)

financial statements

d)

accounting

123.

The difference between assets and liabilities is called _.

a)

equity

b)

business net work

c)

liability

d)

assets

124.

Making decisions that will guide an individual in doing right or wrong is called _.

a)

equity

b)

ethics

c)

business ethics

d)

scandals

125.

_ is a business owned by one person.

a)

Proprietorship

b)

Business plan

c)

Store business

d)

Dealership

126.

Financial rights to the assets of a business are called _.

a)

equities

b)

accounting

c)

assets

d)

liabilities

127.

The equation showing the relationship among assets, liabilities, and owner's equity is called the _.

a)

accounting equation

b)

accounting liabilities

c)

accounting assets

d)

accounting system

128.

A record that summarizes all the transactions pertaining to a single item in the accounting equation is called a(an) _.

a)

account

b)

transaction

c)

account title

d)

capital account

129.

The difference between the increases and decreases in an account is called the _.

a)

account balance

b)

account title

c)

capital account balance

d)

transaction balance

130.

An account used to summarize the owner's equity in a business is called a _.

a)

capital account

b)

account title

c)

account title

d)

transaction balance

131.

A person or business to whom a liability is owed is called a _.

a)

creditor

b)

capital account balance

c)

GAAP

d)

supply

132.

An increase in equity resulting from the sale of goods or services is called _.

a)

revenue

b)

expense

c)

sales

d)

all of the above

133.

A sale for which payment will be received at a later date is called a _.

a)

sale on account

b)

expense

c)

sales

d)

all of the above

134.

The cost of goods or services used to operate a business is called an _.

a)

expense

b)

equity

c)

sales

d)

liability

135.

An organizational tool used in accounting that lists all the accounts used in a business

a)

Expense

b)

File Maintenance

c)

Chart of Accounts

d)

Accounting System

136.

An accounting tool used in analyzing transactions; a graphical representation of an account

a)

X Account

b)

E Account

c)

N Account

d)

T Account

137.
Only accounts with a balance are listed in the Trial Balance columns of a work sheet.
a)
True
b)
False
138.
Adjusting entries must be posted to the general ledger accounts.
a)
True
b)
False
139.
Many businesses choose a one-year fiscal period that ends during a period of high business activity.
a)
True
b)
False
140.
 Two financial statements are prepared from the information on the work sheet.
a)
True
b)
False
141.
When the Income Statement Debit column total is greater than the Income Statement Credit column total on a work sheet, the business has a net income.
a)
True
b)
False
142.
Net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total.
a)
True
b)
False
143.
The amount of the supplies used during a fiscal period is an expense.
a)
True
b)
False
144.
Changes recorded on a worksheet to update general ledger accounts at the end of a fiscal period.
a)
adjustments
b)
alignments
c)
balances
d)
expenses
145.
The difference between total revenue and total expenses when total revenue is greater.
a)
Netting it All
b)
Net Loss
c)
Net Income
d)
Revenue
146.
A columnar accounting form used to summarize the general ledger information needed to p prepare financial statements.
a)
balance sheet
b)
income statement
c)
worksheet
d)
trial balance
147.
Journal entries recorded to update general ledger accounts at he end of a fiscal period.
a)
adjusting entries
b)
controlled entries
c)
balance sheet
d)
income statement
148.
A proof of the equality of debits and credits in a general ledger.
a)
net income
b)
trial entry
c)
income statement
d)
trial balance
149.
The difference between total revenue and total expenses when total expenses are greater.
a)
income statement
b)
net income
c)
net loss
d)
work sheet
150.

Selling merchandise on account will be recorded in the

a)

Sales Journal

b)

Cash Receipts Journal

c)

Cash Payment Journal

d)

Purchases Journal

151.

What is the cash receipts journal used for?

a)

Journalize the receipt of an accounts receivable

b)

journalize the payment of an accounts payable

c)

journalizing supplies expense

d)

journalize the payment for insurance

152.

Which journal is used to record cash and credit card sales?

a)

Purchases Journal

b)

Sales Journal

c)

Cash Payment Journal

d)

Cash Receipts Journal

153.

When recording cash and credit card sales, what do you enter in the account title column?

a)

Company name

b)

Customer name

c)

Check mark

d)

Question mark

154.

At the end of each month, entries in the Special Journals are totaled while the entries in the General Journals are not.

a)

True

b)

False

155.

Every transaction recorded in the cash receipts journal requires ____.

a)

a credit to Accounts Receivable

b)

a debit to Cash in the Bank

c)

a credit to Cash in the Bank

d)

a debit to Accounts Receivable

156.

The totals of the special amount columns in the sales journal and the cash receipts journal are posted ____.

a)

at the end of the month

b)

at the end of the week

c)

once every two weeks

d)

on a daily basis

157.

Special journals ____.

a)

simplify the posting process

b)

simplify the recording process

c)

organize a business's transactions

d)

all of the above

158.
Two major advantages of a special journal are that it saves time in recording and posting business transactions.
a)
True
b)
False
159.
A business handles bank card sales like cash sales because it receives cash from the bank within several days after depositing its bank card sales slips.
a)
True
b)
False
160.
Cash sales are recorded in the sales journal.
a)
True
b)
False
161.

A list of employees in a business and the earnings due to each employee for a specific period of time is a(n) ____.

a)

credit/debit equation

b)

list

c)

payroll

d)

piece rate

162.

An amount subtracted from gross earnings.

a)

deduction

b)

payroll

c)

incentive

d)

benefit

163.

The amount of money actually received by the employee after all deductions are subtracted is called the ____.

a)

direct deposit

b)

commission

c)

gross pay

d)

net pay

164.

The year-to-date gross earnings of an employee.

a)

accumulated earnings

b)

commission

c)

pay rate

d)

overtime

165.

A(n) ____ is a form summarizing information about employees' earnings for each pay period.

a)

software

b)

time card

c)

payroll register

d)

equation

166.

Under federal law, employers are required to withhold certain amounts from the total earnings of each employee to be applied toward payment of employee's federal income tax.

a)

True

b)

False

167.

Separate accounts are kept for each type of earnings deductions.

a)

True

b)

False

168.

A journal shows in one place all the changes in a single account

a)

true

b)

false

169.

The account number is placed in the Post. Ref. column of the journal as the last step in the posting procedure

a)

true

b)

false

170.

The posting reference should always be recorded in the journal's Post. Ref. column before amounts are recorded in the ledger

a)

true

b)

false

171.

The procedure of arranging accounts in a general ledger, assigning account numbers, and keeping records current is know as file maintenance

a)

true

b)

false

172.

The Cash account is the first asset account and is numbered 110

a)

true

b)

false

173.

If the previous account balance and the current entry posted to an account are both debits, the new account balance is a debit

a)

true

b)

false

174.

A group of accounts is called a ledger

a)

true

b)

false

175.

When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515

a)

true

b)

false

176.

The first digit in the account number 520 means that the account is in the

a)

expense division of the general ledger

b)

revenue division of the general ledger

c)

liability division of the general ledger

d)

asset division of the general ledger

177.

The procedure for transferring information from a journal entry to a ledger account is

a)

posting

b)

journalizing

c)

file maintenance

d)

none of these

178.

The last step in the posting procedure is to write the

a)

entry date in the Date column of the account

b)

journal page number in the Post. Ref. column of the account

c)

account number in the Post. Ref. column of the journal

d)

entry amount in the Debit or Credit column of the account

179.

An account number in the journal’s Post. Ref. column shows

a)

the date of the entry

b)

that work on that journal page is completed

c)

the account to which an amount is posted

d)

none of these

180.

If posting is interrupted, the accounting personnel know to resume posting

a)

on the line with a blank Post. Ref. column in the journal

b)

at the beginning of the journal page

c)

the next day

d)

all of these

181.

Determining that the amount of cash agrees with the accounting records is

a)

posting

b)

journalizing

c)

proving cash

d)

none of these

182.

If an error requires a correcting entry, the source document describing the correction to be made

a)

depends on the type of error made

b)

is a check stub

c)

depends on the type of correcting entry

d)

is a memorandum

183.

Which items would you find on a balance sheet?

a)

assets

b)

liabilities

c)

owner's equity

d)

all answers

184.

The amount of money that a company earns is called...

a)

revenue

b)

liabilities

c)

budget

d)

statements

185.

What is net worth of a business?

a)

income statement

b)

balance sheet

c)

owner's equity

d)

statement

186.

This is verification that your bank statement and your checkbook balance out correctly.

a)

Bank reconciliation

b)

Bad Debt

c)

Bond

d)

Budget

187.

Calendar Year means....

a)

Covering 6 months and ending December 31st

b)

Covering 12 months and ending December 31st

c)

Covering 3 months and ending 6 months

d)

A couple of months throughout the year

188.

With each sale on account, a business takes the risk that the customer will never pay the amount owed.

a)

True

b)

False

189.

The account Allowance for Uncollectible Accounts is classified as a(n) __.

a)

Liability

b)

Contra Liability

c)

Asset

d)

Contra Asset

190.

Allowance for Uncollectible Accounts is related to which account?

a)

Accounts Receivable

b)

Notes Receivable

c)

Cash

d)

Accounts Payable

191.

The first step in using the percent of accounts receivable method is to total accounts by "age" group.

a)

True

b)

False

192.

If our owners equity beginning balance is $10,000, the net income is $5,000 and we have additional investments of $2,500; what is our ending owners equity balance?

a)

$17,500

b)

$15,000

c)

$12,500

d)

$10,000

193.

If net income increases by $10,000, the net effect on the financial statements would be:

a)

A decrease to owners equity

b)

An increase to owners equity

c)

A decrease in current assets

d)

A decrease in cash flow

194.

A corporation is owned by

a)

The individual who started the company

b)

Its board of directors

c)

The president of the corporation

d)

Its Stockholders

195.
The income statement can be expressed as an equation:
a)

Income = Income - Expenses

b)

Revenue - Expenses = Net Income (Loss)

c)

Revenue + Expenses = Income/Loss

d)

Expenses = Net Income + Revenue

196.
Examples may include salaries, utilities, rent, insurance, and office supplies.
a)
Revenue
b)
Expense
c)
Net Income
d)
Net Loss
197.

"Assets = Liabilities + Equity" can be displayed on which financial statement?

a)

Balance Sheet

b)

Income Statement

c)

Statement of Owner's Equity

d)

Neither

198.
What are assets?
a)
What a company owns; anything of value owned by a business.
b)
Costs of operating a business.
c)
Detailed plans for the financial needs of individuals, families, and businesses.
d)
Differences between actual and budgeted performance.  
199.

Every financial statement has a heading that indicates the name of the company, title of the report, and the date.

a)

True

b)

False

200.

If a company has more expenses than revenue for the period, it has a ____.

a)

Net Income

b)

Net Loss