Question 1

Which of the following is not an example of an asset?

Accepted Answer

A)  Notes receivable. 
B)  Supplies. 
C)  Prepaid expenses. 
D)  Retained Earnings. 
A)  Notes receivable. 
B)  Supplies. 
C)  Prepaid expenses. 
D)  Retained Earnings.

Question 2

Which of the following statements is TRUE?

Accepted Answer

A)  Asset and liability accounts have a normal debit balance. 
B)  To debit an account means to increase it. 
C)  Contributed capital and retained earnings have a normal credit balance. 
D)  To credit an account means to decrease it. 
A)  Asset and liability accounts have a normal debit balance. 
B)  To debit an account means to increase it. 
C)  Contributed capital and retained earnings have a normal credit balance. 
D)  To credit an account means to decrease it.

Question 3

What is the amount of the current ratio (round to two decimal places)?

Accepted Answer

A)  2.02 
B)  5.00 
C)  5.22 
D)  1.00 
A)  2.02 
B)  5.00 
C)  5.22 
D)  1.00

Question 4

Which of the following statements is TRUE?

Accepted Answer

A)  Transactions are analyzed from the standpoint of the owners. 
B)  All business activities are considered accounting transactions. 
C)  The transaction amount is determined for each exchange based on the cost of the items given and received. 
D)  A business needs journal entries only to show how transactions affect the balance sheet. 
A)  Transactions are analyzed from the standpoint of the owners. 
B)  All business activities are considered accounting transactions. 
C)  The transaction amount is determined for each exchange based on the cost of the items given and received. 
D)  A business needs journal entries only to show how transactions affect the balance sheet.

Question 5

A company borrows $2 million from its bank. It then uses this money to buy equipment. How does this transaction affect the accounting equation?

Accepted Answer

A)  Assets and Liabilities both rise $2 million. 
B)  Assets and Stockholders' Equity both fall $2 million. 
C)  Assets, Liabilities, and Stockholders' Equity are unchanged. 
D)  Stockholders' Equity rises $2 million and Liabilities fall $2 million. 
A)  Assets and Liabilities both rise $2 million. 
B)  Assets and Stockholders' Equity both fall $2 million. 
C)  Assets, Liabilities, and Stockholders' Equity are unchanged. 
D)  Stockholders' Equity rises $2 million and Liabilities fall $2 million.

Question 6

An internal accounting report called a Trial Balance checks whether recorded debits equal recorded credits.

Accepted Answer

A) True 
 B)False

Which of the following is not an example of an asset?

Which of the following statements is TRUE?

What is the amount of the current ratio (round to two decimal places)?

Which of the following statements is TRUE?

A company borrows $2 million from its bank. It then uses this money to buy equipment. How does this transaction affect the accounting equation?

An internal accounting report called a Trial Balance checks whether recorded debits equal recorded credits.

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control and Financial Reporting for Cash and Merchandise Sales

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables, Bad Debt Expense, and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 2: Reporting Investing and Financing Results on the Balance Sheet

Which of the following is not an example of an asset?

Which of the following statements is TRUE?

What is the amount of the current ratio (round to two decimal places)?

Which of the following statements is TRUE?

A company borrows $2 million from its bank. It then uses this money to buy equipment. How does this transaction affect the accounting equation?

An internal accounting report called a Trial Balance checks whether recorded debits equal recorded credits.

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control and Financial Reporting for Cash and Merchandise Sales

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables, Bad Debt Expense, and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters