Multiple choice question based on basic accounts.
1.The two types of accounting are:____ and _____
a.profit and nonprofit.
b.financial and managerial.
c.internal and external.
d.bookkeeping and decision-oriented.
2.A company paid off a note. This transaction decreased assets and:
a. decreased equity
b. decreased liabilities
c. increased expenses
d. increased revenues
3.Which principle states that assets acquired by the business should be recorded at their actual price?
a. cost principle.
b. objectivity principle.
c. reliability principle.
d. stable dollar principle.
4.A company performed services for a customer on account. This transaction ___________________.
a. decreased assets and decreased equity.
b. increased assets and increased liabilities.
c. increased revenue and decreased expenses.
d. fincreased assets and increased revenues.
5.The owner of a business paid cash from his personal checking account to purchase an automobile for his personal use. This transaction _____________.
a.increased a liability account and increased liabilities.
b.decreased cash and increased expenses.
c.increased assets and increased owners' equity.
d.is not a transaction recognized by the business.
6.The results of operations are reported on the ________.
a. statement of operation.
b. statement of financial position.
c. trial balance.
d. statement of stockholders' equity.
7.On November 1 of the current year, Prepaid Rent was debited $5,400 for three months of rent, in advance. The amount of the adjusting entry on December 31 is:
a. $1,800.
b. $3,600.
c. $5,400.
d. $0.