Generally Accepted Accounting Principles and Sample Test Paper
ACCY111 / SAMPLE TEST PAPER Q & A
MULTIPLE CHOICE QUESTIONS (Answers are on page no 16 onwards) Q. What is the primary objective of most businesses? a. To maximize profits b. To pay dividends to stockholders c. To provide a benefit to society d. To manufacture a quality product ANS:
Q. When a business borrows money, it incurs a(n) a. tax. b. liability. c. receivable. d. addtional equity. ANS: Q. When a product is sold, this cost is often called a. cost of goods sold. b. revenue. c. products. d. retained earnings. ANS: Q. The financial resources a business owns are called a. assets. b. liabilities. c. earnings. d. stockholders' equity. ANS:
Q. Rights to receive money from customers are a. liabilities. b. prepaid expenses. c. accounts receivable. d. accounts payable. ANS: Q. Which of the following is considered an asset? a. Accounts payable b. Prepaid expense c. Bad debt d. Stockholders' equity ANS:
Compiled by Manek. 2011.
P age |1
ACCY111 / SAMPLE TEST PAPER Q & A
Q. The role of accounting in business is best defined as a. an information system that provides reports to stakeholders about the economic activities and condition of a business. b. a method of forecasting the future profitability of a company. c. the policies, procedures, and strategies used in a business. d. transaction analysis. ANS: Q. Debts owed by a business are referred to as a. accounts receivable. b. equities. c. stockholders’ equity. d. liabilities. ANS:
Q. A summary of revenue and expenses for a specific period of time is a(n) a. income statement. b. balance sheet. c. statement of cash flows. d. retained earnings statement. ANS: Q. Gilbert, Inc. had the following account balances at September 30, 2010. What is Gilbert’s net income for the month of September? Accounts Payable Capital Cash Equipment Fees Earned Miscellaneous Expense Rent Expense Retained Earnings Wages Expense a. b. c. d. $32,450 $27,450 $6,550 $18,150 $ 5,000 10,000 14,300 15,400 54,400 18,200 4,150 6,550 13,900
ANS:
MULTIPLE CHOICE QUESTIONS (Answers are on page no 16 onwards) Q. What is the primary objective of most businesses? a. To maximize profits b. To pay dividends to stockholders c. To provide a benefit to society d. To manufacture a quality product ANS:
Q. When a business borrows money, it incurs a(n) a. tax. b. liability. c. receivable. d. addtional equity. ANS: Q. When a product is sold, this cost is often called a. cost of goods sold. b. revenue. c. products. d. retained earnings. ANS: Q. The financial resources a business owns are called a. assets. b. liabilities. c. earnings. d. stockholders' equity. ANS:
Q. Rights to receive money from customers are a. liabilities. b. prepaid expenses. c. accounts receivable. d. accounts payable. ANS: Q. Which of the following is considered an asset? a. Accounts payable b. Prepaid expense c. Bad debt d. Stockholders' equity ANS:
Compiled by Manek. 2011.
P age |1
ACCY111 / SAMPLE TEST PAPER Q & A
Q. The role of accounting in business is best defined as a. an information system that provides reports to stakeholders about the economic activities and condition of a business. b. a method of forecasting the future profitability of a company. c. the policies, procedures, and strategies used in a business. d. transaction analysis. ANS: Q. Debts owed by a business are referred to as a. accounts receivable. b. equities. c. stockholders’ equity. d. liabilities. ANS:
Q. A summary of revenue and expenses for a specific period of time is a(n) a. income statement. b. balance sheet. c. statement of cash flows. d. retained earnings statement. ANS: Q. Gilbert, Inc. had the following account balances at September 30, 2010. What is Gilbert’s net income for the month of September? Accounts Payable Capital Cash Equipment Fees Earned Miscellaneous Expense Rent Expense Retained Earnings Wages Expense a. b. c. d. $32,450 $27,450 $6,550 $18,150 $ 5,000 10,000 14,300 15,400 54,400 18,200 4,150 6,550 13,900
ANS: