Ashworth Semester Exam A01S Introduction to Accounting

  

A01S : Introduction to Accounting

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Accounting provides information to:

managers.

government.

investors.

All of the above.

Which is an advantage of a sole proprietorship form of business?

There is limited personal risk.

The business can continue indefinitely.

The owner makes all the decisions.

All of the above.

If total assets are $35,000 and total liabilities are $8,000, Capital must equal:

12000

27000

8000

20000

Revenue, expenses, and withdrawals are subdivisions of:

assets.

liabilities.

owner’s equity.

All of the above.

A formal account that has columns for date, explanation, post reference, debit, and credit is called the:

T account.

standard account form.

ledger.

chart of accounts.

An account that would be decreased by a credit is:

cash.

fees earned.

capital.

accounts payable.

The time period for which a statement of owner’s equity is prepared is a(n):

calendar year.

accounting period.

fiscal period.

accounting cycle.

Financial statements that are prepared for a period shorter than a year are called:

accounting period statements.

fiscal year statements.

interim statements.

journal statements.

How are explanations distinguished in the journal?

They are underlined.

They are in bold print.

They are indented below the credit entries.

They are written at the margin, in line with the debit entries.

Prepaid Rent is considered to be a(n):

liability.

asset.

contra-asset.

revenue.

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