Question: Which of the following forms of organization are considered to be separate entities by accountants?

Answer: Sole proprietorships, partnerships, and corporations

Question: Which of the following is the correct accounting equation?

Answer: Assets = Liabilities + Owner’s Equity

Question: The best definition of asset is the:

Answer: Resources belonging to a company having future benefit to the company

Question: Which of the following represents the proper order of financial statement preparation?

Answer: Income Statement, Statement of Owner’s Equity, Balance Sheet, Statement of Cash Flows

Question: Which of the following financial statements is concerned with the enterprise at a point in time?

Answer: Balance Sheet

Question: The group of users of accounting information charged with achieving the goals of the business is its

Answer: Managers

Question: Which of the following is not a measurement issue in accounting?

Answer: Where to record a business transaction

Question: Which of the following accounts is increased with a debit?

Answer: Prepaid Insurance

Question: Which pair of accounts follows the rules of debit and credit in the same manner?

Answer: Land and Gracie Shands, Whithdrawals

Question: The double-entry system

Answer: All of these choices

• Based on the principle of duality

• - Requires that the total amount of the debits must always equal the total amount of the credits

• - Requires that each transaction be recorded with at least one debit and one credit