Balance Sheet and Expenses
Accounting Principles Questions for IT Students
(Second Semester – 2007/2008)
For each of the following questions, indicate the single best answer:
1. A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the
a. stand alone concept.
b. monetary unit assumption.
c. economic entity assumption.
d. corporate form of ownership
2. All of the financial statements are for a period of time except the
a. income statement.
b. balance sheet
c. owner's equity statement.
d. statement of cash flows
3. A trial balance will not balance if
a. a journal entry is posted twice.
b. a wrong amount is used in journalizing.
c. incorrect account titles are used in journalizing.
d. a journal entry is only partially posted.
4. In a service-type business, revenue is considered earned
a. at the end of the month.
b. at the end of the year.
c. when the service is performed.
d. when cash is received.
5. Adjusting entries are required
a. yearly.
b. quarterly.
c. monthly.
d. every time financial statements are prepared.
6. Each of the following accounts is closed to Income Summary except
a. Expenses.
b. Owner's Drawing.
c. Revenues.
d. All of these are closed to Income Summary.
7. Which of these items would be accounted for as an expense?
a. Repayment of a bank loan.
b. Dividends to stockholders.
c. The purchase of land.
d. Payment of the current period's rent.
8. Which of the following would not be included on a balance sheet?
a. Accounts receivable.
b. Accounts payable.
c. Sales.
d. Cash.
9. Of the following account types, which would be increased by a debit?
a. Liabilities and expenses.
b. Assets and equity.
c. Assets and expenses.
d. Equity and revenues.
10. Cash reduction of capital result in:
a. Increase in owner’s equity and assets
b. Increase in owner’s equity and liabilities
c. Decrease in owner’s equity and assets
d. Decrease in owner’s equity and
(Second Semester – 2007/2008)
For each of the following questions, indicate the single best answer:
1. A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the
a. stand alone concept.
b. monetary unit assumption.
c. economic entity assumption.
d. corporate form of ownership
2. All of the financial statements are for a period of time except the
a. income statement.
b. balance sheet
c. owner's equity statement.
d. statement of cash flows
3. A trial balance will not balance if
a. a journal entry is posted twice.
b. a wrong amount is used in journalizing.
c. incorrect account titles are used in journalizing.
d. a journal entry is only partially posted.
4. In a service-type business, revenue is considered earned
a. at the end of the month.
b. at the end of the year.
c. when the service is performed.
d. when cash is received.
5. Adjusting entries are required
a. yearly.
b. quarterly.
c. monthly.
d. every time financial statements are prepared.
6. Each of the following accounts is closed to Income Summary except
a. Expenses.
b. Owner's Drawing.
c. Revenues.
d. All of these are closed to Income Summary.
7. Which of these items would be accounted for as an expense?
a. Repayment of a bank loan.
b. Dividends to stockholders.
c. The purchase of land.
d. Payment of the current period's rent.
8. Which of the following would not be included on a balance sheet?
a. Accounts receivable.
b. Accounts payable.
c. Sales.
d. Cash.
9. Of the following account types, which would be increased by a debit?
a. Liabilities and expenses.
b. Assets and equity.
c. Assets and expenses.
d. Equity and revenues.
10. Cash reduction of capital result in:
a. Increase in owner’s equity and assets
b. Increase in owner’s equity and liabilities
c. Decrease in owner’s equity and assets
d. Decrease in owner’s equity and