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    Chapter 1 Practice - True or False & Multiple Choice: Take Notes On Class Discussion

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    Jennifer Alyce Rios
    This document provides a practice test on basic accounting concepts for a chapter 1 class. It includes 10 true/false questions and 10 multiple choice questions testing understanding of accounting equations, financial statements, revenues, expenses, assets, liabilities, and equity. The goal is to help students learn fundamental accounting principles like how financing sources are classified, what is reported where, and key term definitions.

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    Chapter 1 Practice - True or False & Multiple Choice: Take Notes On Class Discussion

    Uploaded by

    Jennifer Alyce Rios
    40 views2 pages
    This document provides a practice test on basic accounting concepts for a chapter 1 class. It includes 10 true/false questions and 10 multiple choice questions testing understanding of accounting equations, financial statements, revenues, expenses, assets, liabilities, and equity. The goal is to help students learn fundamental accounting principles like how financing sources are classified, what is reported where, and key term definitions.

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    chp 1 practice

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    This document provides a practice test on basic accounting concepts for a chapter 1 class. It includes 10 true/false questions and 10 multiple choice questions testing understanding of accounting equations, financial statements, revenues, expenses, assets, liabilities, and equity. The goal is to help students learn fundamental accounting principles like how financing sources are classified, what is reported where, and key term definitions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    40 views2 pages

    Chapter 1 Practice - True or False & Multiple Choice: Take Notes On Class Discussion

    Uploaded by

    Jennifer Alyce Rios
    This document provides a practice test on basic accounting concepts for a chapter 1 class. It includes 10 true/false questions and 10 multiple choice questions testing understanding of accounting equations, financial statements, revenues, expenses, assets, liabilities, and equity. The goal is to help students learn fundamental accounting principles like how financing sources are classified, what is reported where, and key term definitions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    CHAPTER 1 PRACTICE – TRUE OR FALSE & MULTIPLE CHOICE

    Take Notes on Class Discussion


    true or false
    1. All corporations acquire financing by issuing stock for sale on public stock exchanges.

    2. Stockholders' equity is the difference between a company’s assets and its liabilities.

    3. A company owes $200,000 on a bank loan. It will be reported by the company as Notes Payable.

    4. Accounts Payable, Notes Payable, and Salaries and Wages Payable are examples of liabilities.

    5. Dividends are subtracted from revenues on the income statement.

    6. Revenue is reported on the income statement only if cash was received at the point of sale.

    7. Generally Accepted Accounting Principles require companies to distribute their earnings to stockholders.

    8. Common Stock is reported as an asset on the balance sheet.

    9. The Securities and Exchange Commission (SEC) is the government agency that has primary responsibility
    for setting accounting standards in the U.S.

    10.The main goal of an accounting system is to capture information about a business so that it can be reported to
    decision makers.

    multiple choice
    1. Financing that individuals or institutions have provided to a corporation is:
    A) always classified as a liability.
    B) classified as a liability when provided by creditors and as stockholders' equity when provided by owners.
    C) always classified as equity.
    D) classified as a stockholders' equity when provided by creditors and a liability when provided by owners.

    2. Which of the following expressions of the accounting equation is correct?


    A) Liabilities + Assets = Stockholder’s Equity
    B) Stockholder’s Equity + Assets = Liabilities
    C) Assets = Liabilities – Stockholder’s Equity
    D) Stockholder’s Equity = Assets – Liabilities

    3. Net income is the amount:


    A) the company earned after subtracting expenses and dividends from revenue.
    B) by which assets exceed expenses.
    C) by which assets exceed liabilities.
    D) by which revenues exceed expenses.

    4. Expenses are reported on the:


    A) income statement in the time period in which they are paid.
    B) income statement in the time period in which they are incurred.
    C) balance sheet in the time period in which they are paid.
    D) balance sheet in the time period in which they are incurred.
    5. Revenues are:
    A) earned by selling goods or services to customers.
    B) amounts that owners have contributed directly to the business.
    C) cash payments that a business has made directly to its owners.
    D) the amount of cash a company has left after it has paid its liabilities.

    6. Profit is equal to:


    A) revenues minus expenses.
    B) assets minus liabilities.
    C) the amount of cash that a company has.
    D) the amount of cash that owners have contributed to the business.

    7. When a company earns net income, the company’s Retained Earnings:


    A) increase.
    B) decrease.
    C) are converted to cash.
    D) are paid to stockholders.

    8. Alpha sold $2,000 of services to Beta on credit. Beta promised to pay for it next month. Alpha will report a
    $2,000:
    A) Accounts Receivable.
    B) Account Payable.
    C) increase in Cash, since Beta is sure to pay next month.
    D) net loss.

    9. Alpha sold $2,000 of services to Beta on credit. Beta promised to pay for it next month. Beta will report a
    $2,000:
    A) Account Payable.
    B) Accounts Receivable.
    C) Decrease in Cash, since it plans to pay for sure next month.
    D) Net income.

    10. Ace Electronics sold $5,000 of goods to customers of which $3,000 has been collected. Ace Electronics
    should report revenues of:
    A) $5,000.
    B) $3,000.
    C) $2,000.
    D) $0.

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