WorksheetsAccounting
Total questions: 59
Worksheet time: 31mins
The payment of profits (earnings) to the stockholders that are recorded through a decrease in equity. (9 letters)
Revenue
Dividends
Expenses
Assets
A financial statement that reports revenue and expenses.
Balance Sheet
Income Statement
Statement of Equity
Cash Flow
Selling goods or services to customers in the course of operating a business.
Revenue
Liabilities
Expenses
Dividends
A financial statement that reports the assets, liabilities, and equity balances on a particular day.
Balance Sheet
Income Statement
Cash Flow
Statement of Equity
Costs incurred in the process of earning revenue that are recorded through a decrease in equity.
Liabilities
Expenses
Assets
Dividends
Future obligations of a business.
Assets
Revenue
Liabilities
Expenses
A stock certificate given to an owner as proof of his investment.
common stock
Balance Sheet
Income Statement
Dividends
Which of the following is NOT a business entity type?
A. Proprietorship
B. Partnership
C. Corporation
D. Revenue Recognition
Q2. Which financial statement shows a company’s financial position at a single point in time?
A. Income Statement
B. Statement of Retained Earnings
C. Balance Sheet
D. Statement of Cash Flows
Q3. Which accounting principle requires recording revenues when earned, not necessarily when cash is received?
A. Matching Principle
B. Revenue Recognition Principle
C. Cost Principle
D. Going-Concern Assumption
Q4. Retained Earnings increase when:
A. Dividends are declared
B. Revenues exceed expenses
C. Expenses exceed revenues
D. Common stock is issued
Q5. Which accounts normally have a credit balance?
Assets
Expenses
Liabilities
Dividends
Q6. The normal balance of an expense account is:
Credit
Debit
Zero
D. Either debit or credit
Q7. Supplies are purchased for $800 on credit. Which accounts are affected?
A. Cash and Supplies
B. Supplies and Accounts Payable
C. Accounts Payable and Cash
D. Supplies Expense and Cash
Q8. Which of the following is a permanent account?
A. Service Revenue
B. Salaries Expense
C. Retained Earnings
D. Dividends
Q9. The first step of the accounting cycle is:
A. Post-closing trial balance
B. Prepare financial statements
C. Analyze transactions
D. Journalize adjusting entries
Q10. Unearned Revenue is classified as a(n):
Asset
Liability
C. Expense
D. Equity account
Q11. Which statement shows revenues and expenses?
A. Balance Sheet
B. Income Statement
C. Retained Earnings Statement
D. Statement of Cash Flows
Q12. Which statement explains changes in equity from net income and dividends?
A. Balance Sheet
B. Statement of Retained Earnings
C. Income Statement
D. Statement of Cash Flows
Q13. What is the effect of issuing $10,000 of common stock?
A. Assets decrease; Equity decreases
B. Assets increase; Equity increases
C. Assets increase; Liabilities increase
D. Assets decrease; Liabilities decrease
Q14. Which accounts are temporary and closed at period-end?
A. Revenues, Expenses, Dividends
B. Assets, Liabilities, Equity
C. Cash, Accounts Payable, Common Stock
D. Equipment, Retained Earnings
Q15. Which principle requires expenses be matched with revenues?
A. Matching Principle
B. Cost Principle
C. Going Concern
D. Entity Assumption
Q16. Prepaid Insurance is classified as:
Asset
B. Liability
Revenue
D. Expense
Q17. Which adjusting entry records revenue earned but not yet received?
A. Debit Accounts Receivable, Credit Revenue
B. Debit Revenue, Credit Accounts Receivable
C. Debit Unearned Revenue, Credit Revenue
D. Debit Cash, Credit Revenue
Q18. What type of account is Unearned Revenue before adjustment?
Asset
Liability
C. Equity
Expense
Q19. Which trial balance is prepared after all closing entries?
A. Unadjusted Trial Balance
B. Adjusted Trial Balance
C. Post-Closing Trial Balance
D. None of these
Q20. Which accounts are closed at the end of the period?
A. Cash and Accounts Receivable
B. Liabilities and Equity
C. Revenues, Expenses, and Dividends
D. Assets and Liabilities
Q21. Which is true of the accounting equation?
A. Assets = Liabilities − Equity
B. Assets = Liabilities + Equity
C. Assets + Liabilities = Equity
D. Assets = Revenues − Expenses
Q22. The Statement of Retained Earnings covers a period of time while the Balance Sheet reports on a specific date.
True
False
Q23. Temporary accounts carry their balances forward into the next accounting period.
True
False
Q24. A debit always increases an asset and decreases a liability.
True
False
Q25. Adjusting entries affect at least one income statement account and one balance sheet account.
True
False
According to the Cost Principle, how should a company record the purchase of goods or services?
a) At their fair market value on the reporting date
b) At the original historical cost paid on the purchase date
c) At the estimated resale value
d) At management’s assessed value
A company buys land in 2015 for $100,000. By 2025, the land’s fair market value has increased to $250,000. According to the Cost Principle, at what value should the land be reported on the company’s balance sheet?
a) $250,000 – the current market value
b) $150,000 – the gain in value since purchase
c) $100,000 – the historical cost at the purchase date
d) $0 – since land is not depreciated
Which of the following best reflects the Business Entity Assumption in accounting?
a) A business and its owner are treated as one single entity for financial reporting
b) Personal and business transactions may be combined in financial statements
c) A business must not commingle personal transactions with business transactions
d) Owners’ personal assets must always be reported on the business’s balance sheet
The owner of a small bakery uses the bakery’s business bank account to pay for her family’s vacation. According to the Business Entity Assumption, how should this transaction be treated in the bakery’s accounting records?
a) It should be recorded as a normal business expense.
b) It should not be recorded in the bakery’s books, because it is a personal expense.
c) It should be recorded as revenue for the business.
d) It should be recorded as additional investment in the business.
According to the Revenue Recognition Principle, when should revenue be recorded?
a) When the customer places an order
b) When the business receives cash payment
c) When revenue is earned, regardless of when cash is received
d) When management decides to recognize it
A consulting company completes a project for a client in September. The client agrees to pay the fee of $5,000 in October. According to the Revenue Recognition Principle, when should the company record the $5,000 as revenue?
a) In September, when the service was performed
b) In October, when the cash is received
c) Split between September and October
d) When the client first signed the agreement
According to the Expense Recognition Principle, when should expenses be recorded?
a) When the bill is received from the supplier
b) When cash is paid for the expense
c) When the expense is incurred, regardless of when cash is paid
d) At the end of the accounting year only
A company’s employees worked and earned $20,000 in wages for December, but the company will not pay them until January. According to the Expense Recognition Principle, when should the $20,000 be recorded as an expense?
a) In January, when the cash is paid
b) In December, when the employees performed the work
c) Half in December and half in January
d) Only when the company has enough cash to pay
Which of the following correctly describes how Accounts Receivable changes?
A) Accounts Receivable increases with a credit and decreases with a debit.
B) Accounts Receivable increases with a debit and decreases with a credit.
C) Accounts Receivable increases with either a debit or a credit.
D) Accounts Receivable does not increase or decrease until payment is made.
Which of the following correctly describes how Accounts Payable changes?
A) Accounts Payable increases with a debit and decreases with a credit.
B) Accounts Payable increases with a credit and decreases with a debit.
C) Accounts Payable increases with either a debit or a credit.
D) Accounts Payable does not increase or decrease until payment is made.
Every transaction must be recorded with at least one ______ account and at least one ______ account.
A) Asset; Liability
B) Debit; Credit
C) Revenue; Expense
D) Cash; Accounts Receivable
Double-entry accounting demands that the accounting equation stay
A) Increased
B) Decreased
C) Balanced
D) Adjusted
A debit to a liability, expense, or dividend account has what effect on the accounting equation?
true
false
What account types are only credited during an accounting period (check all that apply)?
Expenses
Common Stock
Revenue
Assets
What causes an increase to the right side of the accounting equation? (check all that apply)
Debit an expense or dividend account.
Debit a liability.
Credit common stock.
Credit revenue.
Credit a liability.
Debits are always entered on the---------- side of the t-account
left
right
below
top
credit are always entered on the ------- side of the T account
right
top
below
under
The total dollar value of the debits must------- the total dollar value of the credits or the equation will go out of balance.
equal
over
under
negitive
What account types are only debited during an accounting period (check all that apply)?
dividends
expenses
RE
Liabilities
Which of the following formulas correctly calculates Net Income?
A) Net Income = Total Assets - Total Liabilities
B) Net Income = Total Revenue + Total Expenses
C) Net Income = Total Revenue - Total Expenses
D) Net Income = Total Expenses - Total Revenue
Which of the following formulas correctly calculates Stockholders’ Equity?
A) Stockholders' Equity = Total Assets + Liabilities
B) Stockholders' Equity = Stockholders' Investments + Net Income
C) Stockholders' Equity = Stockholders' Investments + Retained Earnings
D) Stockholders' Equity = Total Assets - Liabilities
Which of the following decreases Retained Earnings? (Select all that apply)
A) Net Income
B) Dividends
C) Expenses
D) Revenues
Which of the following increases Retained Earnings?
A) Dividends
B) Expenses
C) Revenues
D) Net Loss
Beginning Retained Earnings = $40,000.
Net Income = $12,000.
Dividends declared = $5,000.
What is Ending Retained Earnings?
A) $47,000
B) $52,000
C) $40,000
D) $57,000
Which of the following transactions decrease Stockholders’ Equity?
A) Issuing new common stock to investors
B) Declaring and paying dividends
C) Purchasing treasury stock
D) Reporting a net loss
1. When are adjusting entries required?
A) At the beginning of the accounting period to record all transactions.
B) At the end of the accounting period to update accounts for revenues earned and expenses incurred.
C) Only when cash is received or paid.
D) Whenever the company decides to issue stock.
Adjusting entries affect only permanent accounts (Assets, Liabilities, Equity).
True
False
