WorksheetsAccounting Principles U1, S2 Quiz
Total questions: 21
Worksheet time: 20mins
If a business owner failed to follow the assumption of "business entity," what complications might arise?
Personal and business finances may become mixed, causing confusion.
The business will automatically make more profit.
Employees will get higher salaries.
The business will not need to pay taxes.
Suppose you are opening a 1,000 square foot baseball card store in a shopping center. You have signed a lease that requires you to pay a monthly rent of $1.75 per square foot, plus 5% of your gross annual sales. What is the total amount of rent you will pay in one year if you have sales of $85,000?
$21,250
$3,000
$4,000
$2,100
If sales at Valley Skateboard Shop are down by 15% compared to last month and rent will increase by $100 next month, what might be a good course of action for the manager?
Hire a more experienced salesperson and consider new paint and awnings.
Ignore the accountant’s advice.
Reduce the shop’s hours.
Stop selling skateboards.
What is an example of an accounting assumption for Greenwood Sky Divers based on the information given?
The owner regularly reviews financial reports.
The owner flies every weekend.
The company is part of a local club.
The company sells food.
Why does the company’s accountant prepare end-of-the-year reports for Greenwood Sky Divers?
To compare results from one year to the next.
To organize flying lessons.
To join the Greenwood Eagles club.
To hire new sky-diving instructors.
What is the business entity assumption in accounting?
The business is treated as separate from its owner’s personal finances.
The business must always make a profit.
The business can mix personal and business expenses.
The business does not need financial reports.
What information in the Greenwood Sky Divers scenario is relevant to accounting?
The owner regularly reviews financial reports and prepares end-of-the-year reports.
The owner gives flying lessons on the side.
The members get together for sky dives on weekends.
The company belongs to a local club.
What might be an input in a personal accounting system?
Income and expenses
Favorite color
Number of friends
Type of car owned
How might you report activities in a personal accounting system?
By creating financial statements
By writing a story
By drawing pictures
By making phone calls
What is a sole proprietorship?
A business owned and run by one person
A business owned by the government
A business owned by many shareholders
A business that does not keep financial records
The Accounting Equation
(a) = (b) + (c)
Match the following
Promises of payment from customers to sellers.
Accounts Receivable
Resources a company owns or controls.
Assets
Creditors' claims on assets.
Liabilities
Owner's claim on assets.
Equity
Increases equity from sales of products and services.
Revenue
If Company A has:
$2,300 in Cash
$400 in Accounts Payable
$500 in Accounts Receivable
$1,100 in Bank Loans
What is Company A's Owners Equity?
The Accounting Equation is the (a) important part of accounting
One objective of Accounting is to depict the (a) position of the company
Property owned by a person or company, regarded as having value is an __________
asset
liability
net worth
pizza
Which business structure is owned and operated by a single individual?
Sole Proprietorship
Corporation
Partnership
Limited Liability Company
