Type:
Test Bank
Resource:
College Accounting
Edition:
15th Edition
Author(s):
Jeffrey Slater Mike Deschamps
College Accounting, 15e (Slater) Chapter 1 Accounting Concepts and Procedures Learning Objective 1-1 1) The type of business organization where the owners are NOT personally liable for the business’s debts is a: A) corporation B) partnership C) sole proprietorship D) All of the above Answer: A Diff: 2 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 2) The purpose of the accounting process is to provide financial information about: A) sole proprietorships B) small businesses C) large corporations D) All of these answers are correct Answer: D Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 3) Accounting provides information to: A) investors B) government C) managers D) All of these answers are correct Answer: D Diff: 2 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles
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4) Which of the following is a characteristic of a sole proprietorship? A) Business owned by more than one person. B) Easy to form. C) Each stockholder acts as an owner of the company. D) Can continue indefinitely. Answer: B Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 5) A partnership is a business which: A) is easy to form B) ends with the death of a partner C) is owned by more than one person D) All of these answers are correct Answer: D Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 6) Which is an advantage of a sole proprietorship form of business? A) There is limited personal risk. B) The business can continue indefinitely. C) The owner makes all the decisions. D) The business is owned by stockholders. Answer: C Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 7) Which of the following is NOT a type of business organization? A) Corporation B) Partnership C) Sole proprietorship D) Limited Asset Corporation Answer: D Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles
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8) A corporation: A) is legally separate from its owners B) is owned by stockholders C) has limited risk to stockholders D) All of the above Answer: D Diff: 2 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 9) The basic accounting equation is: A) Assets + Liabilities = Owner’s Equity B) Assets = Liabilities - Owner's Equity C) Assets = Owner’s Equity - Liabilities D) Assets = Liabilities + Owner's Equity Answer: D Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 10) A law firm would be considered a: A) merchandise company B) manufacturer C) service company D) retailer Answer: C Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 11) GAAP stand for ______________________. A) Generally Accepted Accounting Practices B) General Accounting Accepted Practices C) Generally Accepted Accounting Principles D) General Accounting Application Practices Answer: C Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles
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12) The purchase of supplies for cash would affect which account category? A) Assets B) Liabilities C) Capital D) Expense Answer: A Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Analyze and record transactions and their effects on the financial statements 13) Items owned by the business such as land, supplies and equipment are: A) Assets B) Liabilities C) Owner's Equity D) Expenses Answer: A Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 14) Which of the following is NOT an Asset? A) Cash B) Accounts Receivable C) Buildings D) All of the above are Assets Answer: D Diff: 1 LO: 1-1 AACSB: Reflective Thinking Learning Outcome: Define accounting terms, accounting concepts and principles 15) If total liabilities increased by $10,000 and the assets increased by $10,000 during the accounting period, what is the change in the owner's equity amount? A) No effect on owner's equity B) Decrease of $10,000 C) Increase of $20,000 D) Decrease of $40,000 Answer: A Diff: 2 LO: 1-1 AACSB: Analytical Thinking Learning Outcome: Analyze and record transactions and their effects on the financial statements
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