Interactive Quiz A
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Out of 25 questions, you answered 3 correctly with a final grade of 12%
3 correct (12%)
21 incorrect (84%)
1 unanswered (4%)
The correct answer for each question is indicated by a
A proprietorship employs one full-time accountant. This person is considered an employee.
On the desk in front of her are five different business documents. Which one of the
following would not be considered an original source document from the proprietorship's
point of view?
A bank receipt for $10,000 evidencing yesterday's cash receipts deposited in the
The original copy of the insurance policy taken out by the proprietorship to insure
the vehicle it purchased during its first month of operations. The annual insurance
premium of $500 was printed within the contract.
The invoice received by the proprietorship from Samsung Electronics when the
proprietorship purchased its first lot of inventory to be sold to its customers.
A cancelled check for $500 representing payment in full for the annual insurance
premium mentioned in item B above.
A copy of the Balance Sheet at the end of the company's first year of existence.
Feedback: Although a balance sheet is certainly a type of business document, in financial
accounting it would be considered one of the end products of the accounting cycle. It is
not a business source document.
Oftentimes, the specific name of an account can give you a clue as to whether an account is
an asset, liability, or owner's equity account. Other times, the name of the account seems
to be vague or is only rendered clear after some further explanation. A proprietorship's
Chart of Accounts has 125 accounts in it. The names of three of these accounts are Prepaid
Rent, Unearned Service Revenue, and Interest Income Earned. In order, these accounts
would be classified as which types of accounts?
liability, asset, and revenue accounts in that order
revenue, asset, and liability accounts in that order
liability, revenue, and asset accounts in that order
asset, revenue, and liability accounts in that order
asset, liability, and revenue accounts in that order
Feedback: When the adjective "Prepaid" is used as part of the account name, it signifies
an asset account. When the adjective "Unearned" is used as part of the account name, it
signifies a liability account. And, when the adjective "Earned" is used as part of the
account name, it signifies a revenue account. Thus, the correct order for these three
accounts is asset, liability, and revenue.
What is the difference between the following two sets of accounts: (1) Accounts Receivable
versus Notes Receivable, and (2) Accounts Payable versus Notes Payable?