Question 1. A profit-making business that is a separate legal entity and in which ownership is divided into shares of stock is known as a:
A. sole proprietorship
B. single proprietorship
C. partnership
D. corporation
Question 2. The properties owned by a business enterprise are called:
A. assets
B. liabilities
C. the accounting equation
D. owner's equity
Question 3. A list of assets, liabilities, and owner's equity of a business entity as of a specific date is:
A. a balance sheet
B. an income statement
C. a statement of owner's equity
D. a statement of cash flows
Question 4. If total assets increased $20,000 during a period of time and total liabilities increased $12,000 during the same period, the amount and direction (increase or decrease) of the period's change in owner's equity is:
A. $32,000 increase
B. $32,000 decrease
C. $8,000 increase
D. $8,000 decrease
Question 5. If revenue was $45,000, expenses were $37,500, and the owner's withdrawals were $10,000, the amount of net income or net loss would be:
A. $45,000 net income
B. $7,500 net income
C. $37,500 net loss
D. $2,500 net loss