1. Question : The role of accounting in business is best defined as
Student Answer: an information system that provides reports to stakeholders about the economic activities and condition of a business.
a method of forecasting the future profitability of a company.
the policies, procedures, and strategies used in a business.
transaction analysis.
2. Question : The following are examples of internal stakeholders EXCEPT:
Student Answer: managers.
creditors.
employees.
All of these are internal stakeholders.
3. Question : More than 70% of businesses are organized as what type of business?
Student Answer: Community Not-for-profit
Corporation
General Partnership
Sole proprietorship
4. Question : Which of the following are business stakeholders?
Student Answer: Stockholders
Suppliers
Customers
All of these
5. Question : A note payable requires payment of the amount borrowed plus
Student Answer: interest.
cash.
accounts payable.
investments.
6. Question : Which of the following would NOT be an example of a merchandising business?
Student Answer: General Motors Company
A local grocery store
Books-a-Million
Dunkin Donuts
7. Question : What is the main objective of most business organizations?
Student Answer: To provide a public service
To maximize profits
To provide a benefit to society
To manufacture a quality product
8. Question : An example of a nominal account would be
Student Answer: Allowance for Doubtful Accounts.
Notes Payable.
Prepaid Expense.
Cost of Goods Sold.
9. Question : Which of the following is not presented in an income statement?
Student Answer: Revenues
Expenses
Net income
Dividends
10. Question : The basic financial statements are listed below:
(1) Balance sheet
(2) Statement of retained earnings
(3) Income statement
(4) Statement of cash flows
In which of the following sequences does the accountant ordinarily prepare the statements?
Student Answer: 1, 4, 3, 2
2, 1, 3, 4
3, 2, 1, 4
3, 2, 4, 1
11. Question : The allowance for doubtful accounts is an example of a(n)
Student Answer: expense account.
contra account.
adjunct account.
control account.