Acct 300 Quiz

Distinguish between internal and external sources of funds. Do corporations rely more on external or internal funds as sources of financing?
Question 1 of 20 5.0/ 5.0 Points

Which transaction would be recorded in a cash basis system of accounting?
A.Purchase of equipment by signing a note
B.Purchase of supplies on credit
C.Sale of goods against a note
Correct D.Sale of goods for cash

Answer Key: D

Question 2 of 20 0.0/ 5.0 Points

The credit terms of a sale are normally indicated on a(n):
A.purchase order.
B.invoice.
Incorrect C.bill of lading.
D.check.

Answer Key: B

Question 3 of 20 5.0/ 5.0 Points

Using accrual accounting, expenses are recorded and reported only:
Correct A.when they are incurred, whether or not cash is paid.
B.when they are incurred and paid at the same time.
C.if they are paid before they are incurred.
D.if they are paid after they are incurred.

Answer Key: A

Question 4 of 20 5.0/ 5.0 Points

Which of the following statements is true?
Correct A.The revenue activities of a service business involve providing services to customers.
B.The revenue activities of a merchandising business involve the building of a product.
C.The revenue activities of a service business involve the building of a product.
D.The revenue activities of a merchandising business involve providing services to customers.

Answer Key: A

Question 5 of 20 5.0/ 5.0 Points

Sales discounts are granted by the seller to customers for payment at the end of the month.
Correct
A. True
B. False

Answer Key: False

Question 6 of 20 5.0/ 5.0 Points

If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/eom.Correct

A. True
B. False

Answer Key: True

Question 7 of 20 5.0/ 5.0 Points

Since merchandise inventory is normally sold within a year, how is it reported on the balance sheet?
A.As a revenue