Accounting I
Semester Exam Review
An entry level job performing one or
two accounting tasks is called a(n)
a.
b.
c.
d.
accounting clerk
entrepreneur
internship
staff accountant
5
An entry level job performing one or
two accounting tasks is called a(n)
a.
b.
c.
d.
accounting clerk
entrepreneur
internship
staff accountant
5
To find information about a career in
accounting
a. look for information on accounting careers in
the library
b. research career information on the internet
c. talk to someone who works in the accounting
field
d. all of the above
3
To find information about a career in
accounting
a. look for information on accounting careers in
the library
b. research career information on the internet
c. talk to someone who works in the accounting
field
d. all of the above
3
•
The most common form of business
organization is a
a.
b.
c.
d.
corporation
lemonade stand
partnership
sole proprietorship
10
•
The most common form of business
organization is a
a.
b.
c.
d.
corporation
lemonade stand
partnership
sole proprietorship
10
A merchandising business
a. buys raw materials and transforms
them into finished products
b. buys finished products and resells them
c. provides a service for a fee
d. all of the above
6
A merchandising business
a. buys raw materials and transforms
them into finished products
b. buys finished products and resells them
c. provides a service for a fee
d. all of the above
6
A business that operates to support a
cause or interest is known as a
a.
b.
c.
d.
career goal
not-for-profit organization
private entity
sports franchise
4
A business that operates to support a
cause or interest is known as a
a.
b.
c.
d.
career goal
not-for-profit organization
private entity
sports franchise
4
A corporation is a business organization
that is recognized by law to
a.
b.
c.
d.
have a life of its own
have an active social life
have at least 3 owners
pay no tax
8
A corporation is a business organization
that is recognized by law to
a.
b.
c.
d.
have a life of its own
have an active social life
have at least 3 owners
pay no tax
8
Accounting is often called the
"language of business" because
a. accountants in many companies share
financial information
b. all business owners have a good
understanding of accounting principles
c. it is easy to understand
d. it is fundamental to the communication of
financial information
15
Accounting is often called the
"language of business" because
a. accountants in many companies share
financial information
b. all business owners have a good
understanding of accounting principles
c. it is easy to understand
d. it is fundamental to the communication of
financial information
15
Money supplied by investors, banks, or
owners of a business is called
a.
b.
c.
d.
capital
incurred expenses
secondary alignment
pin money
7
Money supplied by investors, banks, or
owners of a business is called
a.
b.
c.
d.
capital
incurred expenses
secondary alignment
pin money
7
The amount of money earned after
the costs of operating a business are
paid is _______.
capital
b. expense
c. profit
d. revenue
a.
1
The amount of money earned after
the costs of operating a business are
paid is _______.
capital
b. expense
c. profit
d. revenue
a.
1
A free enterprise system allows
businesses to
a. have their government choose their
products
b. produce the goods and services they
choose
c. buy goods at a discount
d. operate at a profit
9
A free enterprise system allows
businesses to
a. have their government choose their
products
b. produce the goods and services they
choose
c. buy goods at a discount
d. operate at a profit
9
Those who transform ideas for
products or services into real-world
businesses are known as
a.
b.
c.
d.
accountants
entrepreneurs
organizers
profit takers
11
Those who transform ideas for
products or services into real-world
businesses are known as
a.
b.
c.
d.
accountants
entrepreneurs
organizers
profit takers
11
One of the disadvantages of a sole
proprietorship is
a. all the profits go to the owner
b. it is easy to set up
c. the owner has all the risks
d. there are few regulations to follow
13
One of the disadvantages of a sole
proprietorship is
a. all the profits go to the owner
b. it is easy to set up
c. the owner has all the risks
d. there are few regulations to follow
13
One example of an accounting
assumption is
a.
b.
c.
d.
business entity
financial accounting
financial reports
management accounting
17
One example of an accounting
assumption is
a.
b.
c.
d.
business entity
financial accounting
financial reports
management accounting
17
A business owned by two or more
people is called
a.
b.
c.
d.
a corporation
a partnership
looking for trouble
venture capital
12
A business owned by two or more
people is called
a.
b.
c.
d.
a corporation
a partnership
looking for trouble
venture capital
12
The total revenue for the period is
$25,496, the total expenses are $13,387,
and the withdrawals account has an ending
balance of $2,500. The capital account
increased by ____________.
a.
b.
c.
d.
$9,609
$12,109
$14,609
$27,996
23
The total revenue for the period is
$25,496, the total expenses are $13,387,
and the withdrawals account has an ending
balance of $2,500. The capital account
increased by ____________.
a.
b.
c.
d.
$9,609
$12,109
$14,609
$27,996
23
Closing entries close the net income or
net loss into the
.
a.
b.
c.
d.
revenue account
expense account
capital account
cash in bank account
20
Closing entries close the net income or
net loss into the
.
a.
b.
c.
d.
revenue account
expense account
capital account
cash in bank account
20
GAAP stands for
a. a clothing store
b. generally accepted accounting period
c.generally accepted accounting principles
d. generally allowed accounting principles
16.
GAAP stands for
a. a clothing store
b. generally accepted accounting period
c.generally accepted accounting principles
d. generally allowed accounting principles
16.
When accounting information is
processed by hand it is called
a.
b.
c.
d.
a financial reporting system
a manual accounting system
an in-house system
open accounting
14.
When accounting information is
processed by hand it is called
a.
b.
c.
d.
a financial reporting system
a manual accounting system
an in-house system
open accounting
14.
The source of information for the
closing entries is the ________.
a.
b.
c.
d.
balance sheet
income statement
work sheet
all the above
22.
The source of information for the
closing entries is the ________.
a.
b.
c.
d.
balance sheet
income statement
work sheet
all the above
22.
The word equities refers to claims
against the assets of a business by
a.
b.
c.
d.
.
creditors only
owners only
customers only
both creditors and owners
25
The word equities refers to claims
against the assets of a business by
a.
b.
c.
d.
.
creditors only
owners only
customers only
both creditors and owners
25
If the trial balance section of the
work sheet is out of balance, the first
thing you should do is .
a. check the ledger accounts against the work
sheet
b. add the columns again
c. recopy the accounts and balances to a new
work sheet
d. look in the ledger for the amount of the
difference
19.
If the trial balance section of the
work sheet is out of balance, the first
thing you should do is .
a. check the ledger accounts against the work
sheet
b. add the columns again
c. recopy the accounts and balances to a new
work sheet
d. look in the ledger for the amount of the
difference
19.
Each of the following is a business
expense except a payment for _____ .
a.
b.
c.
d.
advertising
equipment
monthly rent
utilities bills
24
Each of the following is a business
expense except a payment for _____ .
a.
b.
c.
d.
advertising
equipment
monthly rent
utilities bills
24
Accounting is often called the
"language of business" because
a.
b.
c.
d.
asset accounts
liability accounts
permanent accounts
temporary accounts
18
Accounting is often called the
"language of business" because
a.
b.
c.
d.
asset accounts
liability accounts
permanent accounts
temporary accounts
18
A business that operates to earn
money for its owners is called a(n)
a. career
b. for-profit business
c. owner financed business
d. professional organization
2
A business that operates to earn
money for its owners is called a(n)
a. career
b. for-profit business
c. owner financed business
d. professional organization
2
When closing the withdrawals
account, transfer the balance in this
account to the __________ account.
a.
b.
c.
d.
capital
expense
income summary
revenue
21
When closing the withdrawals
account, transfer the balance in this
account to the __________ account.
a.
b.
c.
d.
capital
expense
income summary
revenue
21
True or False
Corporations often start out as sole
proprietorship or partnerships.
True or False
Corporations often start out as sole
proprietorship or partnerships.
True or False
Accounts Receivable is a liability
account.
True or False
Accounts Receivable is a liability
account.
True or False
The corporation is the easiest form
of business to organize.
True or False
The corporation is the easiest form
of business to organize.
True or False
Every transaction affects two or more
accounts and is recorded by equal
amounts of debits and credits.
True or False
Every transaction affects two or more
accounts and is recorded by equal
amounts of debits and credits.
True or False
An owner’s equity account is increased
on the debit side and normally has a
debit balance.
True or False
An owner’s equity account is increased
on the debit side and normally has a
debit balance.
True or False
An increase in revenue is recorded
as a credit.
True or False
An increase in revenue is recorded
as a credit.
True or False
A credit to an account always increases
it; a debit to an account always
decreases it.
True or False
A credit to an account always increases
it; a debit to an account always
decreases it.
True or False
The debit and credit parts of an entry
must be equal for the accounting
equation to remain in balance.
True or False
The debit and credit parts of an entry
must be equal for the accounting
equation to remain in balance.
True or False
Only businesses that earn a profit will
have the economic resources to
continue to operate.
True or False
Only businesses that earn a profit will
have the economic resources to
continue to operate.
True or False
When revenue accounts are closed,
the Income Summary account is
debited.
True or False
When revenue accounts are closed,
the Income Summary account is
debited.
True or False
Withdrawals is a permanent
account.
True or False
Withdrawals is a permanent
account.
True or False
Increases in expenses are recorded
as debits.
True or False
Increases in expenses are recorded
as debits.
True or False
The balance sheet should be
prepared before the statement of
changes in owner’s equity.
True or False
The balance sheet should be
prepared before the statement of
changes in owner’s equity.
True or False
A work sheet is normally prepared
in pencil on standard multicolumn
accounting paper.
True or False
A work sheet is normally prepared
in pencil on standard multicolumn
accounting paper.
True or False
A net loss occurs when the revenue is
greater than the expenses.
True or False
A net loss occurs when the revenue is
greater than the expenses.
True or False
After each transaction, the basic
accounting equation should remain in
balance.
True or False
After each transaction, the basic
accounting equation should remain in
balance.
True or False
Assets + Liabilities = Owner’s Equity is
another way to express the basic
accounting equation.
True or False
Assets + Liabilities = Owner’s Equity is
another way to express the basic
accounting equation.
True or False
The difference between the debit and
credit amounts in an account is the
account balance.
True or False
The difference between the debit and
credit amounts in an account is the
account balance.
True or False
Temporary capital accounts are
extensions of the owner’s capital
account.
True or False
Temporary capital accounts are
extensions of the owner’s capital
account.
True or False
A journal is like a diary of a business
because it is the only place where
complete details of a transaction are
recorded.
True or False
A journal is like a diary of a business
because it is the only place where
complete details of a transaction are
recorded.
True or False
A creditor has a financial claim to
the assets of a business.
True or False
A creditor has a financial claim to
the assets of a business.
True or False
The total financial claims do not have
to equal the total cost of the property.
True or False
The total financial claims do not have
to equal the total cost of the property.
True or False
Expenses decrease owner’s equity and
are recorded as debits.
True or False
Expenses decrease owner’s equity and
are recorded as debits.
True or False
A fiscal period may be one month,
three months, six months, or even one
year, but usually it is one year.
True or False
A fiscal period may be one month,
three months, six months, or even one
year, but usually it is one year.
True or False
A trial balance is prepared after
posting is completed.
True or False
A trial balance is prepared after
posting is completed.
True or False