NAME:
SECTION:
SCORE:
PROFESSOR:
d.
MULTIPLE CHOICE
1.
Increasing expenses ultimately cause owner’s equity to
a.
Increase
b. Decrease
c.
Not change
d. Answer not given
2.
The double entry recording rule states that for every
transaction, total debits must _________ to the total credits
a.
Be greater
b. Be lesser
c.
Be equal
d. Answer not given
3.
4.
5.
6.
7.
8.
9.
10.
Asset accounts normally have _________________ balance.
An increase in asset is recorded as a _____________
a. Debit; Debit
b. Debit; Credit
c.
Credit; Debit
d. Credit: Credit
Liability accounts normally have ______________ balance.
A decrease is entered as a _________________
a.
Debit; Debit
b. Debit; Credit
c.
Credit; Debit
d. Credit; Credit
The owner’s equity account has normally a __________
balance. The account decreases in the ________ side
a.
Debit; Debit
b. Debit; Credit
c.
Credit; Credit
d. Credit; Debit
Income accounts normally have _________ balances. These
accounts increase in on the ____________ side
a.
Debit; Debit
b.
Debit; Credit
c.
Credit; Credit
d.
Credit; Debit
Expense accounts normally have __________ balances.
These accounts decrease on the ___________ side
a.
Debit; Debit
b. Debit; Credit
c.
Credit; Credit
d. Credit; Debit
An owner’s investment in the business increases __________
and __________
a. Assets; Equity
b. Liabilities; Equity
c.
Assets; Liabilities
d. Answer not given
An increase in expense is a _______ by the rules of debits
and credits
a. Debit
b. Credit
c.
Has no effect
d. Answer not given
A list of assets, liabilities and equity of a particular date is
reported on a
a.
Income statement
b. Statement of cash flows
c.
Statement of financial position
Statement of changes in owner’s equity
11.
If X has liabilities of 457,000 and an owner’s equity of
270,000 how much is the total assets?
a.
187,000
b. 727,000
c.
720,000
d. 0
12.
The cost incurred to purchases or to produce the products
sold to customers during the period
a.
Selling Expense
b. Inventories
c.
Cost of sales
d. Wages expense
13.
Is an economic occurrence that causes changes in an
enterprise’s assets, liabilities and/or equity
a.
transaction
b.
exchange of assets
c.
use of assets
d.
accounting event
14.
Is the time between the acquisition of assets for processing
and their realization in cash or cash equivalents
a. Operating cycle
b. Cash conversion cycle
c.
Inventory cycle
d. None of the above
15.
Which of the following transactions affects the total value of
liabilities of a firm?
a.
Goods purchased from suppliers by cash
b. Interest received from the bank
c.
Goods sold to customers on credit
d. Office equipment bought on credit
16.
Which of the following is not an example of non-current
assets?
a.
Second hand computer for office use
b. Van purchased in installments
c.
Cash equivalents
d. Building used in business
17.
For a liability to exist, three criteria must be met except
a.
Entity has an obligation
b.
The obligation is to transfer economic resource
c.
The obligation is a present obligation that exist of
past and future events
d.
All are included
18.
Which is not an element of an entity’s financial position
a.
Assets
b. Liabilities
c.
Equity
d. All are included
19.
______ is the recording function of the accounting process
a. Bookkeeping
b. Data processing
c.
Auditing
d. Answer not given
Withdrawals are increased by
a. Debits
b. Credits
c.
Both a and b
d. Neither a and b
20.