1. Accounting I Semester Exam Review

2. An entry level job performing one or two accounting tasks is called a(n)
a. accounting clerk
b. entrepreneur
c. internship
d. staff accountant 5

3. An entry level job performing one or two accounting tasks is called a(n)
a. accounting clerk
b. entrepreneur
c. internship
d. staff accountant 5

4. To find information about a career in accounting
look for information on accounting careers in the library
research career information on the internet
c. talk to someone who works in the accounting field
all of the above 3

5. To find information about a career in accounting
look for information on accounting careers in the library
research career information on the internet
c. talk to someone who works in the accounting field
all of the above 3

6. The most common form of business organization is a
a. corporation
b. lemonade stand
c. partnership
d. sole proprietorship 10

7. The most common form of business organization is a
a. corporation
b. lemonade stand
c. partnership
d. sole proprietorship 10

8. A merchandising business
a. buys raw materials and transforms them into finished products
b. buys finished products and resells them
c. provides a service for a fee
d. all of the above 6

9. A merchandising business
a. buys raw materials and transforms them into finished products
b. buys finished products and resells them
c. provides a service for a fee
d. all of the above 6

10. A business that operates to support a cause or interest is known as a
career goal
b. not-for-profit organization
private entity
d. sports franchise 4

11. A business that operates to support a cause or interest is known as a
career goal
b. not-for-profit organization
private entity
d. sports franchise 4

12. A corporation is a business organization that is recognized by law to
a. have a life of its own
b. have an active social life
c. have at least 3 owners
d. pay no tax 8

13. A corporation is a business organization that is recognized by law to
a. have a life of its own
b. have an active social life
c. have at least 3 owners
d. pay no tax 8

14. Accounting is often called the "language of business" because
accountants in many companies share financial information
all business owners have a good understanding of accounting principles
c. it is easy to understand
it is fundamental to the communication of financial information 15

15. Accounting is often called the "language of business" because
accountants in many companies share financial information
all business owners have a good understanding of accounting principles
c. it is easy to understand
it is fundamental to the communication of financial information 15

16. Money supplied by investors, banks, or owners of a business is called
a. capital
b. incurred expenses
c. secondary alignment
d. pin money 7

17. Money supplied by investors, banks, or owners of a business is called
a. capital
b. incurred expenses
c. secondary alignment
d. pin money 7

18. a. capital b. expense c. profit d. revenue 1
The amount of money earned after the costs of operating a business are paid is _______.
a. capital
b. expense
c. profit
d. revenue 1

19. a. capital b. expense c. profit d. revenue 1
The amount of money earned after the costs of operating a business are paid is _______.
a. capital
b. expense
c. profit
d. revenue 1

20. A free enterprise system allows businesses to
a. have their government choose their products
b. produce the goods and services they choose
c. buy goods at a discount
d. operate at a profit 9

21. A free enterprise system allows businesses to
a. have their government choose their products
b. produce the goods and services they choose
c. buy goods at a discount
d. operate at a profit 9

22. Those who transform ideas for products or services into real-world businesses are known as
a. accountants
b. entrepreneurs
c. organizers
d. profit takers 11

23. Those who transform ideas for products or services into real-world businesses are known as
a. accountants
b. entrepreneurs
c. organizers
d. profit takers 11

24. One of the disadvantages of a sole proprietorship is
a. all the profits go to the owner
b. it is easy to set up
c. the owner has all the risks
d. there are few regulations to follow 13

25. One of the disadvantages of a sole proprietorship is
a. all the profits go to the owner
b. it is easy to set up
c. the owner has all the risks
d. there are few regulations to follow 13

26. One example of an accounting assumption is
a. business entity
b. financial accounting
c. financial reports
d. management accounting 17

27. One example of an accounting assumption is
a. business entity
b. financial accounting
c. financial reports
d. management accounting 17

28. A business owned by two or more people is called
a. a corporation
b. a partnership
c. looking for trouble
d. venture capital 12

29. A business owned by two or more people is called
a. a corporation
b. a partnership
c. looking for trouble
d. venture capital 12

30. The total revenue for the period is $25,496, the total expenses are $13,387, and the withdrawals account has an ending balance of $2,500. The capital account increased by ____________.
a. $9,609
b. $12,109
c. $14,609
d. $27,996 23

31. The total revenue for the period is $25,496, the total expenses are $13,387, and the withdrawals account has an ending balance of $2,500. The capital account increased by ____________.
a. $9,609
b. $12,109
c. $14,609
d. $27,996 23

32. Closing entries close the net income or net loss into the .
a. revenue account
b. expense account
c. capital account
d. cash in bank account 20

33. Closing entries close the net income or net loss into the .
a. revenue account
b. expense account
c. capital account
d. cash in bank account 20

34. GAAP stands for a. a clothing store
b. generally accepted accounting period
c. generally accepted accounting principles
d. generally allowed accounting principles
16.

35. GAAP stands for a. a clothing store
b. generally accepted accounting period
c. generally accepted accounting principles
d. generally allowed accounting principles
16.

36. When accounting information is processed by hand it is called
a. a financial reporting system
b. a manual accounting system
c. an in-house system
d. open accounting
14.

37. When accounting information is processed by hand it is called
a. a financial reporting system
b. a manual accounting system
c. an in-house system
d. open accounting
14.

38. The source of information for the closing entries is the ________.
a. balance sheet
b. income statement
c. work sheet
d. all the above
22.

39. The source of information for the closing entries is the ________.
a. balance sheet
b. income statement
c. work sheet
d. all the above
22.

40. The word equities refers to claims against the assets of a business by .
a. creditors only
b. owners only
c. customers only
d. both creditors and owners 25

41. The word equities refers to claims against the assets of a business by .
a. creditors only
b. owners only
c. customers only
d. both creditors and owners 25

42. If the trial balance section of the work sheet is out of balance, the first thing you should do is .
check the ledger accounts against the work sheet
add the columns again
c. recopy the accounts and balances to a new work sheet
look in the ledger for the amount of the difference
19.

43. If the trial balance section of the work sheet is out of balance, the first thing you should do is .
check the ledger accounts against the work sheet
add the columns again
c. recopy the accounts and balances to a new work sheet
look in the ledger for the amount of the difference
19.

44. Each of the following is a business expense except a payment for _____ .
a. advertising
b. equipment
c. monthly rent
d. utilities bills 24

45. Each of the following is a business expense except a payment for _____ .
a. advertising
b. equipment
c. monthly rent
d. utilities bills 24

46. Accounting is often called the "language of business" because
a. asset accounts
b. liability accounts
c. permanent accounts
d. temporary accounts 18

47. Accounting is often called the "language of business" because
a. asset accounts
b. liability accounts
c. permanent accounts
d. temporary accounts 18

48. A business that operates to earn money for its owners is called a(n)
a. career
b. for-profit business
c. owner financed business
d. professional organization 2

49. A business that operates to earn money for its owners is called a(n)
a. career
b. for-profit business
c. owner financed business
d. professional organization 2

50. When closing the withdrawals account, transfer the balance in this account to the __________ account.
a. capital
b. expense
c. income summary
d. revenue 21

51. When closing the withdrawals account, transfer the balance in this account to the __________ account.
a. capital
b. expense
c. income summary
d. revenue 21

52. True or False

53. Corporations often start out as sole proprietorship or partnerships.
True or False

54. Corporations often start out as sole proprietorship or partnerships.
True or False

55. Accounts Receivable is a liability account.
True or False

56. Accounts Receivable is a liability account.
True or False

57. The corporation is the easiest form of business to organize.
True or False

58. The corporation is the easiest form of business to organize.
True or False

59. Every transaction affects two or more accounts and is recorded by equal amounts of debits and credits.
True or False

60. Every transaction affects two or more accounts and is recorded by equal amounts of debits and credits.
True or False

61. An owner’s equity account is increased on the debit side and normally has a debit balance.
True or False

62. An owner’s equity account is increased on the debit side and normally has a debit balance.
True or False

63. An increase in revenue is recorded as a credit.
True or False

64. An increase in revenue is recorded as a credit.
True or False

65. A credit to an account always increases it; a debit to an account always decreases it.
True or False

66. A credit to an account always increases it; a debit to an account always decreases it.
True or False

67. The debit and credit parts of an entry must be equal for the accounting equation to remain in balance.
True or False

68. The debit and credit parts of an entry must be equal for the accounting equation to remain in balance.
True or False

69. Only businesses that earn a profit will have the economic resources to continue to operate.
True or False

70. Only businesses that earn a profit will have the economic resources to continue to operate.
True or False

71. When revenue accounts are closed, the Income Summary account is debited.
True or False

72. When revenue accounts are closed, the Income Summary account is debited.
True or False

73. Withdrawals is a permanent account.
True or False

74. Withdrawals is a permanent account.
True or False

75. Increases in expenses are recorded as debits.
True or False

76. Increases in expenses are recorded as debits.
True or False

77. The balance sheet should be prepared before the statement of changes in owner’s equity.
True or False

78. The balance sheet should be prepared before the statement of changes in owner’s equity.
True or False

79. A work sheet is normally prepared in pencil on standard multicolumn accounting paper.
True or False

80. A work sheet is normally prepared in pencil on standard multicolumn accounting paper.
True or False

81. A net loss occurs when the revenue is greater than the expenses.
True or False

82. A net loss occurs when the revenue is greater than the expenses.
True or False

83. After each transaction, the basic accounting equation should remain in balance.
True or False

84. After each transaction, the basic accounting equation should remain in balance.
True or False

85. Assets + Liabilities = Owner’s Equity is another way to express the basic accounting equation.
True or False

86. Assets + Liabilities = Owner’s Equity is another way to express the basic accounting equation.
True or False

87. The difference between the debit and credit amounts in an account is the account balance.
True or False

88. The difference between the debit and credit amounts in an account is the account balance.
True or False

89. Temporary capital accounts are extensions of the owner’s capital account.
True or False

90. Temporary capital accounts are extensions of the owner’s capital account.
True or False

91. A journal is like a diary of a business because it is the only place where complete details of a transaction are recorded.
True or False

92. A journal is like a diary of a business because it is the only place where complete details of a transaction are recorded.
True or False

93. A creditor has a financial claim to the assets of a business.
True or False

94. A creditor has a financial claim to the assets of a business.
True or False

95. The total financial claims do not have to equal the total cost of the property.
True or False

96. The total financial claims do not have to equal the total cost of the property.
True or False

97. Expenses decrease owner’s equity and are recorded as debits.
True or False

98. Expenses decrease owner’s equity and are recorded as debits.
True or False

99. A fiscal period may be one month, three months, six months, or even one year, but usually it is one year.
True or False

100. A fiscal period may be one month, three months, six months, or even one year, but usually it is one year.
True or False

101. A trial balance is prepared after posting is completed.
True or False

102. A trial balance is prepared after posting is completed.
True or False