Question 1 

(1 point)
 
If a company borrows money from a bank and signs an
agreement to repay the loan several years from now, in which
account would the company report the amount borrowed?

Question 1 options:

Retained Earnings

Notes Payable (long-term)

Common Stock

Accounts Payable

Question 2 (1 point)

 
The Sweet Smell of Success Fragrance Company borrowed
$60,000 from the bank to be paid back in five years and used all
of the money to purchase land for a new store. Sweet Smell's
balance sheet would show this as:

Question 2 options:

$60,000 under Land and $60,000 under Notes Payable (long-term)

$60,000 under Land and $60,000 under Notes Receivable (long-term)

$60,000 under Depreciation Expense and $60,000 under Notes Payable (long-term)

$60,000 under Other Assets and $60,000 under Other Liabilities

Question 3 (1 point)
 
Which account is affected by recording the buying of goods on
credit?

Question 3 options:

Cash

Retained Earnings

Common Stock

Accounts Payable

Question 4 (1 point)

 
Sofa So Good, Inc. signs a contract with a programmer for the
development of software that will be developed, delivered and
paid for in the next year. The signing of the contract:

Question 4 options:

has no effect on the account equation

increases assets

increases liabilities

decreases stockholder’s equity

Question 5 (1 point)

 
A company has $26,000 in its Land account, $10,000 in its
Inventory account, and $6,000 in its Notes Payable (short-term)
account. If its only other account is Common Stock, what is the
balance of that account?

Question 5 options:

$10,000

$42,000

$30,000

$22,000

Question 6 (1 point)

 
Stockholders’ equity in a corporation consists of:

Question 6 options:

Amounts invested and reinvested by a company’s owners

Resources presently owned by a business that generate future economic benefits

Amounts invested in assets that will be used for one or more years

Amounts presently owed by a business

Question 7 (1 point)

 
The requirement that transactions be recorded at their exchange
price at the transaction date is called the:
Question 7 options:

conservatism exception

separate entity assumption

cost principle

monetary unit assumption

Question 8 (1 point)

 
Which of the following is NOT an accounting transaction?

Question 8 options:

Issued shares of stock to investors in exchange for cash contributions of $4,000

Ordered inventory from suppliers for $3,000

Sold equipment to another company for $3,000 and accepted a note from the company promising
payment in 6 months

Borrowed money from the bank by signing a promissory note for $2,000

Question 9 (1 point)

 
In April, Pizza Aroma hired a new employee at a rate of $1,000
per month to start work at the beginning of May. In April, Pizza
Aroma should record:

Question 9 options:

nothing, because an exchange of promises is not a transaction

 a $1,000 increase to Prepaid wages and a $1,000 decrease to Cash

a $1,000 increase to Wage expense and a $1,000 decrease to Cash

a $1,000 increase in Wages Payable and a $1,000 increase in Wages Expense

Question 10 (1 point)

 
When a business issues stock, what does it give to its owners?

Question 10 options:

Note Payable

Common Stock

Retained Earnings

Cash