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Finals Question
Finals Question
(FALSE)
2. Accounting is the process of recording and classifying business financial transactions. (FALSE)
3. The Accrual Method (basis) of accounting records income in the period earned and expenses in
the period incurred. (TRUE)
4. The only users of financial information are the owners of a business. (FALSE)
5. A calendar year is the accounting period used by most businesses. (TRUE)
6. Profit is the amount that a business's expenses exceed revenues. (FALSE)
7. Asset Accounts normally have a credit balance. (FALSE)
8. Owner's Withdrawals are not used to figure the profit or loss for a business. (TRUE)
9. Expense Accounts normally have a debit balance. (FALSE)
10. A debit increases the balance of a liability and revenue account. (FALSE)
11. Plant Machinery is a type of asset. (TRUE)
12. A Chart of Accounts is a coded listing of all the accounts included in the General Ledger. (TRUE)
13. A T-Account is a formal accounting record. (FALSE)
14. Every business needs a complex and detailed chart of accounts. (FALSE)
15. The purpose of a chart of accounts is to establish a framework for classifying, recording, and
reporting business transactions. (TRUE)
a. corporation.
b. proprietor.
c. government unit.
d. partnership.
2. Which of the following is not one of the three forms of business organization?
a. Corporations
b. Partnerships
c. Proprietorships
d. Investors
3. Which of the following would not be considered an internal user of accounting data for the Xanadu
Company?
b. Production manager
4. The liability created by a business when it purchases coffee beans and coffee cups on credit from
a. account payable.
b. account receivable.
c. revenue.
d. expense.
a. account payable.
b. account receivable.
c. liability.
d. revenue.
a. a revenue.
b. an expense.
c. a liability.
d. an asset.
a. income statement.
c. balance sheet.
a. Accounts Receivable
b. Accounts Payable
c. Common Stock
d. Dividends
10. To show how successfully your business performed during a period of time, you would report its
b. income statement.
14. Which of the following financial statements is concerned with the company at a point in time?
a. Balance sheet
b. Income statement
1. A
2. D
3. D
4. A
5. B
6. B
8. B
9. A
10. B
14. A