KPS 7th Hr. Chapter 1.2

Question 1

Assets have value bc they can be used to acquire other assets or be used to operate a business

Accepted Answer

True

Question 2

Realization of Revenue is applied when revenue is recorded at the time goods/services are sold.

Accepted Answer

True

Question 3

Generally Accepted Accounting Principles, GAAP, allows for flexibility in reporting.

Accepted Answer

False

Question 4

Business costs in terms of hours required to complete projects = unit of measurement concept

Accepted Answer

False

Question 5

A sale for which payment will be received at a later date.

Accepted Answer

Sale on Account

Question 6

A withdrawal decreases owner's equity.

Accepted Answer

True

Question 7

The accounting equation does not have to be in balance to be correct.

Accepted Answer

False

Question 8

A company pays insurance premiums in advance to an insurer, records the payment as a liability.

Accepted Answer

False

Question 9

When items are bought and paid for later, this is referred to as buying on account

Accepted Answer

True

Question 10

If 2 amounts are recorded on the same side of the accounting equation, it wont be in balance.

Accepted Answer

False

Question 11

Accounting is the language of business.

Accepted Answer

True

Question 12

The right & wrong that guide an individual in making personal decisions=business ethics

Accepted Answer

False

Question 13

When cash is paid for expenses, the business has more equity.

Accepted Answer

False

Question 14

Received cash from sale, the total amount of both assets & owner's equity is increased.

Accepted Answer

True

Question 15

Assets taken from the business for the owner's personal use

Accepted Answer

Withdrawals

Question 16

A person or business to whom a liability is owed.

Accepted Answer

Creditor

Question 17

An increase in equity resulting from the sale of goods or services.

Accepted Answer

Revenue

Question 18

The relationship among assets, liabilities, and owner's equity can be written as an equation.

Accepted Answer

True

Question 19

When cash is paid on account, a liability is increased

Accepted Answer

False

Question 20

Company receives cash f/ sale, cash account balance & increases the accounts receivable balance

Accepted Answer

False

Question 21

An account used to summarize the owner's equity in a business.

Accepted Answer

Capital Account

Question 22

A creditor would favor a positive net worth.

Accepted Answer

True

Question 23

The costs of goods or service used to operate a business.

Accepted Answer

Expense

Question 24

Keeping personal & business records separate is an application of the business entity concept.

Accepted Answer

True

KPS 7th Hr. Chapter 1.2

Questions 24

KPS 7th Hr. Chapter 1.2

Questions 24