NBE Exam: Accounting and Small Business Management

A CR side entry on a revenue account indicates the account has been a. Increased b. Decreased c. Balanced d. Unchanged

A

A mortgage payable for this month is a a. Current liability b. Long-term liability c. Liability d. Current asset

A

A official form which gives what is owed, what is owned, and what the owner is worth is the a. Balance sheet b. Trial balance c. Profit and loss sheet d. Income and expense

A

A partnership is not a legal entity for most purposes. a. True b. False

A

According to GAAP, a business is accounted for as a separate entity, separate and distant from its owners. a. True b. False

A

Accounts payable is a/an a. Liability account b. Asset account c. Expense account d. Proprietorship account

A

After completing interviews to hire a new employee in a decision is made not to hire a person because they were over the age of 55, this would be a violation of what government act? a. Age discrimination in employment act b. Equal employment opportunity act c. Equal pay act d. Fair labor standards act

A

An incoming partner is liable for partnership debits contracted before his entry into the business. a. True b. False

A

Any income received but not yet having services rendered is a. Deferred income b. Interest c. Net profit d. Gross profit

A

Anyone - person or company- who is to receive payment on a promissory note, check, draft or money order is a a. Vendee b. Payee c. Debtor d. Offeror

A

Anyone who owes debts is a a. Debtor b. Creditor c. Vendor d. Offeror

A

Expenses incurred but not yet paid are called accrued expenses. a. True b. False

A

If the credit balance exceeds the debit balance in the income statement columns, the difference is net income for the period. a. True b. False

A

Increases in all liability accounts are recorded by credits. a. True b. False

A

Making even small disbursements from cash receipts weakens internal control over cash. a. True b. False

A

Partnership property is not protected against the creditors of one partner. a. True b. False

A

Revenues usually increase both assets and owner equity. a. True b. False

A

The balance sheet lists the assets of a business in the claims against those assets. a. True b. False

A

The customers written promise to pay a sum of money to the business at a future date is called a a. Note receivable b. Account receivable c. Account payable d. Note payable

A

The ending inventory of merchandise of one fiscal period it's always the beginning inventory of the next period. a. True b. False

A

The gross profit method may be used to estimate the cost of inventory without the taking of a physical inventory. a. True b. False

A

The left side of all accounts is referred to as the debit side. a. True b. False

A

The mechanics of double-entry bookkeeping require that for each transaction, total debits be equal in amount to total credits. a. True b. False

A

The net worth of a firm is equal to its owner equity. a. True b. False

A

The process of ledger recording of information is called a. Posting b. Journalizing c. Putting ledgering

A

The purchase journal is used for a. Recording purchase of an article on credit b. Receiving cash for merchandise c. Record of merchandise sales for credit d. Recording cash payments

A

The purpose of a purchase account is to accumulate and summarize the cost of merchandise purchased during the period. a. True b. False

A

The sole owner of a business is the a. Proprietor b. Drawer c. Endorser d. Debtor

A

This group of accounts are credited to increase a. Liabilities and capital b. Capital expenses c. Liabilities and assets d. Liabilities and expenses

A

Total debits and credits differences in a "I" account is the a. Balance b. Assets c. Depreciation d. Cash

A

What a liability account is DR, this indicates the account has been a. Decreased b. Footed c. Increase d. Balanced

A

When an expense account is debited, it indicates that the account has been a. Increased b. Decreased c. No change d. Eliminated

A

Which government act regulates public entry and exit accommodations of the funeral home? a. Americans with disabilities act b. Civil rights act c. Environmental protection agency d. Occupational safety and health act

A

A CR entry on an expense account indicates the account has been a. Balance b. Decreased c. Not affected d. Increased

B

A book for entry of a particular type of transaction is a/an a. Ledger b. Special journal c. General journal d. Double book entry

B

A check that has been issued but has not yet been paid is a/an a. Asset b. Outstanding c. Cancelled d. Stabbed

B

A ledger is a book of a. Original entries b. Accounts c. Trial balance d. Accounting statements

B

A liability is something a funeral director a. Owns b. Owes c. Spends d. Trades

B

A limited partnership allows an individual to invest and make management decisions in a business without incurring the liability associated with a regular partnership. a. True b. False

B

A partnership is limited to two individuals who both participate in the profits of the business according to some agreement. a. True b. False

B

A temporary owner's equity account used to record the earning of revenue. a. Revenue b. Sales c. Expense d. Net sales

B

Accounting information is used only by the owners of a business. a. True b. False

B

After all adjusting and clearing entries are posted, the accounting cycle has been completed. a. True b. False

B

An individual owning a funeral home as a proprietorship reports business income on his own income tax return and is generally not liable for debits incurred by the business. a. True b. False

B

Any debits that are not due and payable within a year or called a. Current liability b. Long-term liability c. Fixed asset d. Current asset

B

Anything of value owned is a/an a. Liability b. Asset c. Expense d. Partnership

B

Debit memorandums originate with the buyer, while credit memorandums originate with the seller. a. True b. False

B

Disbursements from petty cash funds are recorded in the accounts as they are made. a. True b. False

B

Generally, you may only issue as many shares of total stock as you can sell or exchange in a one year period. a. True b. False

B

If the total of the left side of an account exceeds the total of its right side, a credit balance is said to exist. a. True b. False

B

Ordinary corporation stock usually entitles the owner to one vote for each 10 shares he requires plus the right to dividends. a. True b. False

B

Revenue accounts are closed to the income summary account by crediting revenues in debiting the income summary. a. True b. False

B

The FIFO method of inventory valuation assigned the costs of the oldest units to the ending inventory. a. True b. False

B

The more people responsible for a given task, the more effective the control. a. True b. False

B

The payment of a liability increases assets and the owners equity. a. True b. False

B

The principal of a note multiplied by the interest rate equals the interest on a note. a. True b. False

B

The proprietorship of a business may be decreased by a. Net income in investment of assets in the business by the owner b. Expenses in withdraws of assets from the business by the owner c. Borrowing from banks and purchases of assets on credit d. Collection of accounts receivable and borrowing from banks

B

The purchases account, used when merchandise is purchased for resale, shows whether the merchandise is on hand or has been sold. a. True b. False

B

The terms owner equity and liabilities are synonymous. a. True b. False

B

The total assets of a firm are restricted to the amount that owners are able to provide with their own resources. a. True b. False

B

To establish petty cash, you a. DR cash and CR accounts payable b. DR petty cash and CR cash c. DR cash and CR petty cash d. DR accounts payable and CR cash

B

What is the disadvantage of the Limited Liability Company form of business? a. Divided authority can lead to disharmony b. If improperly structured it can be taxed as a "C" corporation c. Separation of ownership and control d. Unlimited liability

B

What type of valuation method, to determine a selling price, is used by calculating the worth of business as if all tangible assets were sold at auction? a. Earnings valuation approach b. Liquidation value approach c. Market value approach d. Replacement value approach

B

When a business keeps merchandise for sale, it is called a. Fixed assets b. Inventory c. Capital d. Supplies

B

When a check or draft is made, the person who signs is known as a. Maker b. Drawer c. Drawee d. Proprietor

B

When a corporation makes a distribution of profits to each stockholders as declared by the board of directors, it is called a. Gross earnings b. Dividend c. Interest d. Investment

B

When a liability account is a credit entry, it indicates the account has been a. Decreased b. Increase c. Balanced d. Footed

B

When all the accounts are listed showing their arrangement in the ledger, the listing is called the a. Trial balance b. Chart of accounts c. Balance sheet d. Accounts payable ledger

B

When an income account is credited, it indicates that the account has been a. Decrease b. Increased c. Balanced d. Footed

B

Which of the following is not a current asset? a. Cash b. Land c. Inventory d. Accounts receivable

B

A book for recording the buying of goods on credit is called a a. Cash payments journal b. General journal c. Purchase journal d. Sales journal

C

A credit balance to show what is owed is normally shown as a/an a. Advertising b. Accounts receivable c. Accounts payable d. Cash

C

A decrease in net worth because of excess of cost and expenses over income is called a. Income b. Retaining earning c. Loss d. Proprietorship

C

A loan from your bank which is secured by property is a. An account payable b. An asset c. A mortgage payable d. A note receivable

C

A person making a check or draft ordering payment to be made is the a. Vendor b. Drawee c. Drawer d. Endorser

C

A person owning a corporation's stock is called a a. Custodian b. Maker c. Stakeholder d. Director

C

A tangible asset is a/an a. Money b. Not physical or material c. Capable of being touched d. Used up and short period of time

C

Accounts receivable is a/an a. Liability account b. Expense account c. Asset account d. Capital account

C

Accounts which you are unable to collect are a. Accrued b. Fixed assets c. Bad debts c. Incurred income

C

An account called accounts payable will be shown on the a. Profit and loss statement b. Income statement c. Balance sheet d. Proprietorship sheet

C

The selling price is determined by the cost of an item with an amount added to it. That amount added is called a. Interest b. Shipping cost c. Mark up d. Other income

C

The time an owner allows for the payment of a sale is a/an a. Fiscal period b. Fiscal year c. Terms d. Intangible assets

C

The total of sales of funeral services would be shown on the a. Balance sheet b. Work sheet c. Income sheet d. Bank statement

C

This group of accounts will increase if debited a. Assets and liabilities b. Assets and income c. Assets and expenses d. Expenses and revenue

C

What should be considered for business location? a. Customer image b. Merchandise display c. Room for expansion d. Visual spaciousness

C

When a business owns things of value, they are classed as a. Capital b. Liabilities c. Assets d. Expenses

C

When a business transactions result in increasing revenue, it is a. Interest b. Expense c. Income d. Principle

C

When a fixed asset is no longer of any value, the amount it will sell for is called a. Mark-up b. Margin c. Cost scrap value d. Variable cost

C

When a funeral coach is purchased on credit, you a. CR Funeral coach and DR accounts payable b. DR cash and CR funeral coach c. DR Funeral coach and CR accounts payable d. DR funeral coach and CR cash

C

When a funeral director purchases rolling stock on credit, his bookkeeping entry is a. DR accounts payable and CR purchases b. DR casket coach and CR cash c. DR casket coach and CR accounts payable d. CR casket coach and DR accounts payable

C

When a proprietorship account is DR, it indicates the account has been a. Balance b. Increased c. Decreased d. Footed

C

A special fun for use in disbursing small sums of money is called a a. Working fund b. Escrow cash c. Loan fund d. Petty cash

D

A total usually written in small pencil figures under the last entry of a column is a a. Balance b. Journalizing c. Assets d. Footing

D

A written promise to pay money to another person or business at a specific or determinable time is a/an a. Stock certificate b. Asset c. Bad debt d. Promissory note

D

And official paper showing quantity, description, prices of items, total amount of purchase in terms of payments is called a. Ledger b. Journal c. Packing slip d. Invoice

D

Any excess of current assets over current liabilities is called a. Total capital b. Net worth c. Gross margin d. Net working capital

D

The profit and loss statement may be called a. Balance sheet b. Trial balance c. Work sheet d. Income and expense statement

D

The records of a business or first written in a book called a. Ledger b. Index c. Schedule d. Journal

D

When a bank has been ordered to make payment on a check or draft, the bank is the a. Payee b. Maker c. Drawer d. Drawee

D

When the fixed asset loses value due to wear overtime, it is called a. Income b. Dividends c. Sales d. None of these

D