Accounting Quiz 1

Which of the following is NOT part of the accounting process? Select one: a. Financial decision making b. Communicating c. Identifying d. Recording

a. Financial decision making

The Relias Uptown Grill receives a bill of $400 from the Erml Advertising Agency. The owner, John Relias, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is: Select one: a. an increase in Accounts Payable and a decrease in Retained Earnings. b. a decrease in Cash and an increase in Retained Earnings. c. a decrease in Accounts Payable and an increase in Retained Earnings. d. a decrease in Cash and an increase in Accounts Payable.

a. an increase in Accounts Payable and a decrease in Retained Earnings.

Internal users of accounting data include: Select one: a. company officers b. economic planners c. investors d. customers

a. company officers

A net loss will result during a time period when: Select one: a. expenses exceed revenues. b. revenues exceed expenses. c. assets exceed stockholders' equity. d. assets exceed liabilities.

a. expenses exceed revenues

A company might carry on many activities that do NOT represent business transactions such as: Select one: a. placing an order for merchandise with a supplier. b. paying wages. c. using office supplies. d. borrowing money from the bank.

a. placing an order for merchandise with a supplier.

Which of the following would NOT appear on the DeFlippo Company's balance sheet? Select one: a. Wages payable. b. Utilities expense. c. Retained earnings. d. Accounts receivable.

b. Utilities expense

The monetary unit assumption: Select one: a. is only used for financial statements of banks. b. requires that only transaction data capable of being expressed in terms of money be included in the accounting records of the economic entity. c. provides that the unit of measure fluctuates over time. d. is unimportant in applying the cost principle.

b. requires that only transaction data capable of being expressed in terms of money be included in the accounting records of the economic entity.

As of December 31, 2013, Morley Company has liabilities of $5,000 and stockholders' equity of $7,000. It received revenues of $23,000 during the year ended December 31, 2013. What are the assets for Morley Company as of December 31, 2013? Select one: a. $2,000. b. $35,000. c. $12,000. d. $25,000.

c. 12,000.

Poindexter Co. pays a $500 dividend in cash. The effect on the specific items in the basic accounting equation is: Select one: a. an increase in Salary Expense and a decrease in Cash. b. an increase in Accounts Receivable and a decrease in Retained Earnings. c. a decrease in Retained Earnings and a decrease in Cash. d. an increase in Retained Earnings and a decrease in Cash.

c. a decrease in Retained Earnings and a decrease in Cash.

Morreale Beaver Company buys a $12,000 van on credit. This transaction will affect the: Select one: a. income statement only. b. income statement and retained earnings statement only. c. balance sheet only. d. income statement, retained earnings statement, and balance sheet.

c. balance sheet only