Accounting Questions

Choose the correct answer from the given alternatives

1. A profit-making business operating as a separate legal entity and in which ownership is
divided in to shares of stock is known as a:
A. Proprietorship B. Service business C. partnership D. Corporation
2. The resource owned by a business are called:
A. Asset B. Liability C. Owner’s Equity D. The accounting equation
3. listing of a business entity’s assets, liabilities, and owner’s equity as of a specific date is
A. A balance sheet C. an income statement
B. A statement of owner’s equity D. a statement of cash flows.
4. If total assets increased $20,000.00 during a period and total liabilities increased $
12,000.00 during the same period, the amount and direction(increase or decrease) of the
change in owner’s equity for that period is:
A. A $32,000.00 increase C. an $8,000.00 increase
B. A $32,000.00 decrease D. an $8,000.00 decrease.
5. If revenue was $45,000.00, expense were $37,500.00, and the owner’s withdrawals were
$10,000.00, the amount of net income or net loss would be:
A. 445,000 net income C. $37,500 net loss
B. $7,500 net income D. $2,500 net loss
6. A debit may signify:
A. An increase in an asset account. C. an increase in a liabilities account
B. A decrease in asset account D. an increase in the owner’s capital account
7. The type of account with a normal credit balance is:
A. An asset B. Drawing C. a revenue D. an expense
8. A debit balance in which of the following accounts would indicate a likely error?
A. Accounts Receivable B. Cash C. Fees earned D. miscellaneous exp.
9. The receipt of cash from costumers in payment of their accounts would be recorded by a:
A. Debit to cash; credit to accounts receivable.
B. debit to Accounts Receivable; credit to cash.
C. debit to Cash: credit to Accounts Payable
D. debit to Account Payable; credit to Cash.
10. The form listing the titles and balances of accounts in the ledger on a given is the:
A. Income statement. C. statement of owner’s equity.
B. Balance sheet D. trial balance.