Business Accounting - Chapter 2
Understanding Business Accounting
Test your knowledge of basic accounting concepts with this engaging quiz! Designed to challenge your understanding of business transactions, accounting principles, and financial reporting, this quiz offers a comprehensive overview of key topics in accounting.
Key Features:
- 16 thought-provoking questions
- Multiple choice format for easy answering
- Instant feedback on your selections
A transaction is any event that has a financial impact on the business and that can be measured.
True
False
Business events are recorded even if the financial impact cannot be measured.
True
False
Transactions provide objective information about the financial impact of an exchange on an entity.
True
False
The account is the basic summary device of accounting.
True
False
An account receivable represents the promise of the business to pay a debt.
True
False
Prepaid rent is an expense because the payment provides a future benefit of the company.
True
False
Assets include cash, land, and accounts payable.
True
False
Cost of goods sold is an example of a revenue account.
True
False
An accrued liability is a liability for an expense that has not yet been paid.
True
False
A prepaid expense is an asset.
True
False
Which of the following is NOT a business transaction?
A company buys goods on account
A company sells land for cash
A company fired 10 percent of the employees due to poor sales
A company borrows money from the bank
Which of the following is a business transaction?
A company signs a contract for services to be provided during the first quarter of the next fiscal year
A company pays its employees a year-end bonus
A company hires a new marketing manager.
A company applies for a mortgage that will be used to purchase a new office building.
Which transaction increases stockholders' equity?
Sale of common stock
Dividends that are declared and paid
Expenses greater than revenues for the period
Payment of operating expenses
Which transaction decreases stockholders' equity?
Sale of common stock
Cash purchase of land
Total revenues greater than total expenses for the period
Total expenses greater than total revenues for the period
Which transaction decreases stockholders' equity?
Inventory was purchased on account
Services were performed on account
Services were performed and cash was immediately received from the customers
Employees worked one week and were paid at the end of the week.
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