Question

1) Statement of financial position (commonly referred to as)

a) Balance Sheet

b) Income Statement

c) Statement of Cash Flows

d) Statement of Owners’ Equity

2) A financial Statement that describes where the enterprise stands at a specific date is.

a) Balance Sheet

b) Income Statement

c) Statement of Cash Flows

d) Statement of Owner’s Equity

3) Income statement is an activity statement that depicts the revenues and expenses for a designated period of time

a) Balance Sheet

b) Income Statement

c) Statement of Cash Flows

d) Statement of Owner’s Equity

4) A statement particularly important in understanding an enterprise for purpose of investment and credit decisions is

a) Balance Sheet

b) Income Statement

c) Statement of Cash Flows

d) Statement of Owner’s Equity

5) Which of the following is not a user of internal accounting information?

a) Store Manager

b) Chief executive officer

c) Creditor

d) Chief financial officer

6) Purpose of an accounting system includes all of the following accept:

a) Interpret and record the effects of business transactions

b) Classify the effects of transactions to facilitate the preparation of reports

c) Summarize and communicate information to decision makers

d) Dictate the specific types of business transactions that the enterprise may engage in

7) What information would you find in a statement of cash flows that you would not be able to get from other two primary financial statements?

a) Cash provided by or used in financing activities

b) Cash balance at the end of the period

c) Total liabilities due to creditors at the end of the period

d) Net Income

8) A transaction caused a $.15, 000 decreases in both total assets and total liabilities. This transaction could have been:

a) Purchase of a delivery truck for $.15, 000 cash.

b) An asset with a cost of $.15, 000 was destroyed by fire.

c) Repayment of a $.15, 000 bank loan.

d) Collection of a $.15, 000 account receivable.

9) According to the rules of debit and credit for balance sheet accounts :

a) Increase in asset, liability, and owners’ equity accounts are recorded by debits.

b) Decrease in asset and liability accounts are recorded by credits.

c) Increase in asset and owner’s equity accounts are recorded by debits

d) Decrease in liability and owners’ equity accounts are recorded by debits.

10) Indicate all correct answers .Dividends

a) Decrease owners’ equity, & are recorded by debiting the dividend account

b) Decrease net income

c) Are a business account

d) All of the given options