Financial Accounting Principles 1: Test #1 - Multiple Choice

1) Multiple Choice (20 marks) 1. The primary objective of financial reporting is toprovide information:A. useful for making investment decisions and for assessing management's stewardship.B. to the federal government.C. regarding the cash flows of the business.D. about the profitability of the business.2. All of the following are forms of businessorganizations except:A. partnership.B. proprietorship.C. governmental unit. D. corporation.3. Which of the following forms of business organizations protect the personal assets of theowners from creditors of the business?A. proprietorship B. corporationC. partnershipD. corporation and partnership4. GAAP stands for:A. generally accepted auditing practices.B. generally accrued accounting principles.C. generally accrued auditing procedures.D. generally accepted accounting principles. 5. The accounting equation can be stated as:A. Liabilities = Assets + Owner's Equity. B. Assets − Liabilities = Owner's Equity.C. Owner's Equity = Assets + Liabilities.D. Assets = Liabilities − Owner's Equity.6. All of the following are assets except:A. cash. B. land.C. merchandise inventory.D. owner withdrawals.7. If owner's equity is $135,000 and total liabilities are $90,000, then total assets would be: A. $225,000. B. $90,000. C. $135,000. D. $45,000. 8. Earning revenue on account: A. decreases owner's equity. B. decreases assets. C. increases liabilities. D. increases owner's equity. 9. Purchasing office equipment on account would: A. increase liabilities and decrease owner's equity. B. have no effect on total assets or liabilities. C. increase total assets and increase liabilities. D. increase total assets and decrease owner's equity. 10. The financial statement that presents a summary of the assets, liabilities, and owner's equity as of a specific date is the: A. statement of owner's equity. B. cash flow statement. C. balance sheet. D. statement of assets. 11. Each financial statement includes a heading giving three pieces of data. Which of the following items is not included in these headings? A. Name of the business B. Name of the preparer of the statement C. Date or time period covered D. Name of the financial statement 12. All of the following are assets except: A. accounts payable. B. land. C. accounts receivable. D. cash.