Site MapHelpFeedbackTrue/False Quiz
True/False Quiz
(See related pages)

1
Bookkeeping is an information and measurement system that identifies, classifies, records, and communicates relevant information to people to help them make better decisions.
A)True
B)False
2
Accounting involves only recording economic transactions and events, either electronically or manually and is also known as record keeping.
A)True
B)False
3
The organization responsible for setting accounting rules in the United States is the Securities and Exchange Commission (SEC).
A)True
B)False
4
A partnership is a business that is owned by two or more people, and that is not organized as a corporation.
A)True
B)False
5
Assets are the economic resources that are expected to produce future benefits.
A)True
B)False
6
The equation of Assets = Liabilities + Equity is called the balanced business equation.
A)True
B)False
7
The owner's claims to an organization's assets are called liabilities.
A)True
B)False
8
Liabilities are owners' claims on an organization's assets.
A)True
B)False
9
The balance sheet reports the changes that occurred in assets, liabilities, and owner's equity at a point in time.
A)True
B)False
10
Net income is an important connection between the income statement and the statement of changes in owner's equity.
A)True
B)False
11
Internal users of accounting information include banks, shareholders, creditors, suppliers, and customers.
A)True
B)False
12
The area of accounting aimed at serving external users is called managerial accounting.
A)True
B)False
13
External users of accounting information include banks, shareholders, and customers.
A)True
B)False
14
Financial accounting provides information to the organization's decision makers.
A)True
B)False
15
Ethics are beliefs that distinguish right from wrong.
A)True
B)False
16
The purpose of an audit is to determine whether the financial statements fairly reflect the company's financial position and operating results in accordance with generally accepted accounting principles (GAAP); and to add credibility to the information in the statements.
A)True
B)False
17
The largest percentage of accounting jobs occurs in the private accounting field.
A)True
B)False
18
Return on investment is calculated by dividing the net income for the period by the average total assets of the period.
A)True
B)False
19
Financial statements include the balance sheet, income statement, statement of owner's equity, and the statement of cash flows.
A)True
B)False
20
An excess of expenses over revenues for a period is called net profit.
A)True
B)False
21
Expenses are outflows or the using up of assets as a result of the major or central operations of a business.
A)True
B)False
22
Another term used for net assets is equity.
A)True
B)False
23
A financial statement that describes where a company's cash came from (receipts) and where it went (payments) during the period is called the statement of cash flows.
A)True
B)False
24
Expenses are payments of cash or other assets from a proprietorship or partnership to its owner or owners.
A)True
B)False
25
The cost principle requires that $16,000 spent for equipment with a market value of $19,000 should be recorded at the actual cost of $16,000.
A)True
B)False
26
The monetary unit principle requires every business to be accounted for separately from its owner or owners.
A)True
B)False
27
The accounting guideline that requires financial statement information to be supported by independent, unbiased evidence rather than someone's opinion is the called the objectivity principle.
A)True
B)False
28
The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is called the going-concern or continuing-concern principle.
A)True
B)False
29
The business entity principle is based on the notion that transactions and events should be measured and recorded in monetary units.
A)True
B)False
30
Assets are equal to liabilities minus equity.
A)True
B)False
31
Assets total $48,000, liabilities total $10,000, and equity is $38,000. If assets decrease by $6,000 and equity increases by $2,000, then liabilities must decrease by $8,000.
A)True
B)False
32
Some business transactions have an effect on one or more of the elements or components of the accounting equation.
A)True
B)False
33
Net income, additional investment(s) and withdrawals are found on the Statement of Owner's Equity.
A)True
B)False
34
After every business transaction is correctly recorded and reported, the accounting equation will be in balance.
A)True
B)False
35
Under the revenue recognition principle revenue is recognized only after services have been provided and the revenue is earned.
A)True
B)False
36
When the owner withdraws cash from the business, Cash will decrease and withdrawals will decrease.
A)True
B)False
37
When the owner makes the initial investment into a new business, assets are increased and owner's equity is increased.
A)True
B)False
38
The purchase of a new piece of equipment entirely with cash will cause an increase in assets and an increase in liabilities.
A)True
B)False
39
When a firm purchases supplies on credit, liabilities are increased and assets are increased.
A)True
B)False
40
When a firm pays its employees cash for the work they have done, assets are increased and equity is increased.
A)True
B)False
41
The payment of cash to a vendor to whom money is owed (account payable) results in fewer assets and fewer liabilities.
A)True
B)False
42
When the risk is low, the return on the investment is usually lower than it would be if the risk of the investment were high.
A)True
B)False
43
The three major activities in business organizations include financing, investing, and operating.
A)True
B)False





To learn more about the book this website supports, please visit its Information Center.
(c)2005 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.


Accounting PrinciplesOnline Learning Center with Powerweb

Home > Chapter 1 > Interactive Quiz B