Reference no: EM13598065
1. Which of the following is NOT a characteristic of a corporation?
- Corporations are organized as a separate legal taxable entity.
- Ownership is divided into shares of stock.
- Corporations experience an ease in obtaining large amounts of resources by issuing stock.
- A corporation's resources are limited to its individual owners' resources.
- Corporations make up 20% of all businesses.
2. A list of assets, liabilities, and owners' equity as of a specific date is a(n)
- income statement.
- balance sheet.
- statement of cash flows.
- retained earnings statement.
3. Which of the following is an appropriate representation of the accounting equation?
- Assets + liabilities = stockholders' equity
- Assets = liabilities + stockholders' equity
- Assets = liabilities
- Assets = liabilities + retained earnings
4. The sales revenue generated during the normal course of business would be an example of which type of business activity?
- Operating
- Investing
- Financing
- None of these
5. Anderson, Inc. purchased land for cash. What effect does this transaction have on the following accounts:
- Increase in Cash and decrease in Land
- Decrease in Cash and decrease in Land
- Increase in Cash and increase in Land
- Decrease in Cash and increase in Land
6. Better Belly, Inc. had the following assets and liabilities as of September 30, 2009:
Assets
$54,433
Liabilities
$28,416
What is the stockholders' equity of Better Belly as of September 30, 2009?
- $0
- $26,017
- $82,849
- Cannot be determined with this information
7. A to Z Corporation engaged in the following transaction "Issued a $30,000 note payable to borrow cash from the bank." On the Statement of Cash Flows, the transaction would be classified as
- Cash Flows from Operating Activities.
- Cash Flows from Investing Activities.
- Cash Flows from Financing Activities.
- Noncash transaction.
8. If Assets have a balance of $50,000 and Stockholders' Equity has a balance of $40,000, then Liabilities must have a balance of
- $90,000.
- $20,000.
- $40,000.
- $10,000.
9. Unearned revenue is what type of an account?
- Asset
- Revenue
- Stockholders' equity
- Liability
10. If prepaid insurance expires over time, this asset account becomes a(n)
- liability.
- another asset.
- revenue.
- expense.
11. Accrued expenses are ordinarily reported on the balance sheet as
- assets.
- liabilities.
- fixed assets.
- prepaid expenses.
12. Unearned rent, representing rent paid for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n)
- asset.
- liability.
- capital stock.
- revenue.
13. Gross profit is equal to
- sales plus (sales discounts and sales returns and allowances) plus cost of merchandise sold.
- sales plus sales returns and allowances less sales discounts less cost of merchandise sold.
- sales plus sales discounts less sales returns and allowances less cost of merchandise sold.
- sales less (sales discounts and sales returns and allowances) less cost of merchandise sold.
14. Since merchandise inventory is normally sold within a year, how is it reported on the balance sheet?
- As a revenue
- As the cost of merchandise sold
- It does not appear on the Balance Sheet
- As a current asset
15. Apple Co. sells merchandise on credit to Zea Co. in the amount of $8,000. The invoice is dated on September 15 with terms of 1/15, net 45. What is the amount of the discount, and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?
- $160, September 30
- $160, September 25
- $80, September 30
- $80, September 25
16. If a $10,000 sale is made on January 1, with terms of 2/10, n/30, how much would the discount be if payment is made on January 9?
17. Which of the following would be deducted from the balance per books on a bank reconciliation?
- Service charges
- Outstanding checks
- Deposits in transit
- Notes collected by the bank
18. A firm's internal control environment is influenced by
- Management's operating style.
- organizational structure.
- personnel policies.
- all of these.
19. The objectives of internal control are to
- control the internal organization of the accounting department personnel and equipment.
- provide reasonable assurance that assets are safeguarded, information is processed accurately, and laws and regulations are complied with.
- prevent fraud and promote the social interest of the company.
- provide control over "internal-use only" reports and employee internal conduct.
20. Which of the following is NOT defined as cash?
- Coins
- Checks
- Money orders
- Commercial paper