Quiz 1: Introduction to Accounting and

Bookkeeping
Started on Wednesday, 4 October 2023, 8:47 PM
State Finished
Completed on Wednesday, 4 October 2023, 8:59 PM
Time taken 11 mins 33 secs
Grade 15 out of 15 (100%)
Question 1

Question text
The asset created by a business when it makes a sale on account is termed

Question 1Answer
a. accounts payable
b. prepaid expense
c. unearned revenue
d. accounts receivable
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The correct answer is: accounts receivable

Question 2
Question text
The assets and liabilities of the company are P155,000 and P60,000 respectfully.
Stockholders’ equity should equal

Question 2Answer
a. P215,000
b. P95,000
c. P155,000
d. P60,000
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The correct answer is: P95,000

Question 3
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Which of the following is not an asset?

Question 3Answer
a. Cash
b. Investments
c. Inventory
d. Stockholders’ Equity
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The correct answer is: Stockholders’ Equity

Question 4
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Which of the following best describes accounting?

Question 4Answer
a. records economic data but does not communicate the data to users according to any
specific rules
b. is used only for filling out tax returns and for financial statements for various type of
governmental reporting requirements
c. is of no use by individuals outside of the business
d. is an information system that provides reports to stakeholders
Feedback
The correct answer is: is an information system that provides reports to stakeholders

Question 5
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The accounting equation may be expressed as

Question 5Answer
a. Assets - Liabilities = Stockholders’ Equity
b. Assets + Liabilities = Stockholders’ Equity
c. Assets = Revenues less Liabilities
d. Assets = Equities - Liabilities
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The correct answer is: Assets - Liabilities = Stockholders’ Equity

Question 6
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A financial statement user would determine if a company was profitable or not during a
specific period of time by reviewing

Question 6Answer
a. the Income Statement.
b. the Balance Sheet.
c. the Statement of Cash Flows.
d. cannot be determined.
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The correct answer is: the Income Statement.

Question 7
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Which of the following is the best description of accounting’s role in business?

Question 7Answer
a. Accounting provides creditors and banks with information regarding the credit risk
rating of the company.
b. Accounting is not responsible for providing any form of information to stakeholders.
That is the role of the Information Systems Department.
c. Accounting provides information to managers to operate the business and to other
stakeholders to make decisions regarding the economic condition of the company.
d. Accounting provides stockholders with information regarding the market value of the
company’s stocks.
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The correct answer is: Accounting provides information to managers to operate the
business and to other stakeholders to make decisions regarding the economic condition
of the company.

Question 8
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Which of the following is not a business transaction?

Question 8Answer
a. sell goods for cash
b. make a sales offer
c. receive cash for services to be rendered later
d. pay for supplies
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The correct answer is: make a sales offer

Question 9
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Goods purchased on account for future use in the business, such as supplies, are called

Question 9Answer
a. revenues
b. prepaid expenses
c. prepaid liabilities
d. liabilities
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The correct answer is: prepaid expenses

Question 10
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An entity that is organized in which ownership is divided into shares of stock is a

Question 10Answer
a. proprietorship
b. corporation
c. partnership
d. governmental unit
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The correct answer is: corporation
Question 11
Question text
Which of the following is not a role of accounting in business?

Question 11Answer
a. To assess the various informational needs of stakeholders and design its accounting
system to meet those needs.
b. To provide reports to stakeholders about the economic activities and conditions of a
business.
c. To provide information for managers to use in operating the business.
d. To personally guarantee loans of the business.
Feedback
The correct answer is: To personally guarantee loans of the business.

Question 12
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Debts owed by a business are referred to as

Question 12Answer
a. stockholders’ equity
b. accounts receivables
c. equities
d. liabilities
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The correct answer is: liabilities

Question 13
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How does the purchase of supplies on account affect the accounting equation?

Question 13Answer
a. assets increase; stockholders' equity decreases
b. liabilities increase; stockholders' equity decreases
c. assets increase; liabilities decrease
d. assets increase; liabilities increase
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The correct answer is: assets increase; liabilities increase

Question 14
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Assets are

Question 14Answer
a. the same as expenses because they are acquired with cash
b. financed by the company and/or creditors
c. either cash or accounts receivables
d. always greater than liabilities.
 Feedback
The correct answer is: financed by the company and/or creditors

Question 15
Question text
If the president of the company wanted to know how money flowed into and out of the
company, what financial statement would she use?

Question 15Answer
a. Income Statement
b. Statement of Cash Flows
c. Balance Sheet
d. None are correct.
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The correct answer is: Statement of Cash Flows