2361 Exam 1 Practice Ch 1-4 multiple choice

2361 Exam 1 Practice Ch 1-4 multiple choice - Page 1 1. The...

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Unformatted text preview: Page 1 1. The accounting concept which maintains that each organization or section of an organization stands apart from other organizations and individuals is known as the: a. reliability principle b. entity concept c. going-concern concept d. monetary unit concept 2. The principle which states that assets acquired by the business should be recorded at their exchange price is the: a. objectivity principle b. stable dollar principle c. reliability principle d. cost principle 3. Economic resources of a business that are expected to be of benefit in the future are referred to as: a. assets b. stockholders' equity c. expenses d. revenues 4. Assets at the beginning of the period amount to $25,000 and $30,000 at the end of the period. Liabilities at the beginning of the period amount to $12,000 and $15,000 at the end of the period. What is the amount of the change and the direction of the change in stockholders' equity for the period? a. increase of $2,000 b. decrease of $2,000 c. increase of $15,000 d. decrease of $13,000 5. Which of the following describes a liability: a. economic obligations to creditors b. future economic benefits c. accounts receivable d. paid-in capital 6. Revenues are: a. increases in liabilities resulting from delivering goods or services to customers b. decreases in assets resulting from delivering goods or services to customers c. increases in retained earnings resulting from delivering goods or services to customers d. decreases in retained earnings resulting from delivering goods or services to customers Page 2 7. Expenses are: a. increases in assets resulting from operations b. decreases in retained earnings resulting from operations c. increases in liabilities resulting from purchasing assets d. increases in retained earnings resulting from operations 8. Dividends appear on the: a. balance sheet b. income statement c. retained earnings statement d. retained earnings statement and the income statement 9. A company's financial position at the end of the period may be found by looking on the: a. balance sheet b. statement of cash flows c. income statement d. retained earnings statement 10. The date of the income statement: a. covers a period of time b. covers one day in time c. is not dated d. may cover a period of time or only one day in time 11. Current assets are assets expected to be converted to cash, sold, or consumed: a. within the next year or operating cycle, whichever is longer b. within the next year or operating cycle, whichever is shorter c. within the next 6 months d. within the next 2 years 12. Increases in stockholders' equity arise from: a. investments by the owner b. payment of dividends c. net income earned during the period d. both a and c 13. Decreases in stockholders' equity result from: a. a net loss during the period b. owner investments c. a net income during the period d. both b and c Page 3 14. Which of the following statements should be prepared before the balance sheet is prepared?...
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2361 Exam 1 Practice Ch 1-4 multiple choice - Page 1 1. The...

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