# Basic Arithmetic Quiz

30 Questions | Total Attempts: 229

Settings

Can you answer all these simple questions about basic arithmetic? Let's prove yourself now!

• 1.
Which of the following groups would be considered an internal user of financial statements?
• A.

Stockholders

• B.

Factory managers supervising production line workers for Westinghouse

• C.

Assets = Liabilities + Owners' Equity

• D.

FASB (Financial Accounting Standards Board).

• 2.
Which of the following would be classified as external users of financial statements?
• A.

Factory managers supervising production line workers for Westinghouse

• B.

Stockholders

• C.

FASB (Financial Accounting Standards Board).

• D.

Assets = Liabilities + Owners' Equity

• 3.
The accounting equation can be stated as
• A.

Assets = Liabilities + Owners' Equity

• B.

Stockholders

• C.

FASB (Financial Accounting Standards Board).

• D.

Provide information for decision making

• 4.
The organization primarily responsible for setting accounting principles (GAAP) today is the:
• A.

Stockholders

• B.

Assets = Liabilities + Owners' Equity

• C.

Provide information for decision making

• D.

FASB (Financial Accounting Standards Board).

• 5.
Which of the following is the primary objective of financial reporting?
• A.

Provide information for decision making

• B.

Factory managers supervising production line workers for Westinghouse

• C.

Stockholders

• D.

Assets = Liabilities + Owners' Equity

• 6.
You are a banker and Phillip Morris, Inc., a tobacco company, has given you its most recent annual report in an effort to get a sizeable loan. The company is very profitable and appears to have a sound financial position. Based on a report presented on prime-time television last night, you are aware the company is a defendant in lawsuits from several states and by other parties that have been adversely impacted by cigarettes. The information presented on television is an example of financial information that is
• A.

to those willing to spend the time to understand it.

• B.

Relevant

• C.

Accounts receivable

• D.

Provide information for decision making

• 7.
The preparation of financial statements require that the information be understandable
• A.

to those willing to spend the time to understand it.

• B.

Relevant

• C.

Provide information for decision making

• D.

Factory managers supervising production line workers for Westinghouse

• 8.
Which of the following items is reported as a current asset on a classified balance sheet?
• A.

Provide information for decision making

• B.

to those willing to spend the time to understand it.

• C.

Accounts receivable

• D.

Relevant

• 9.
Working capital is defined as
• A.

current assets minus current liabilities.

• B.

to those willing to spend the time to understand it.

• C.

Relevant

• D.

Accounts receivable

• 10.
If Sales equal \$357,000, Cost of Goods Sold equals \$218,000, and Operating Expenses equal \$98,000, what is Gross Profit?
• A.

\$139,000.

• B.

current assets minus current liabilities.

• C.

\$15,000.

• D.

to those willing to spend the time to understand it.

• 11.
If total assets were \$50,000 and total liabilities were \$35,000, then stockholders' equity would be
• A.

\$139,000.

• B.

\$15,000.

• C.

Accounts receivable

• D.

to those willing to spend the time to understand it.

• 12.
The financial statement that lists the revenues and expenses is referred to as the
• A.

Income Statement.

• B.

Accounts receivable

• C.

\$139,000.

• D.

satisfy the need for full disclosure of all the facts relevant to a company's results and financial position.

• 13.
One of the purposes of the notes to financial statements is to
• A.

\$15,000.

• B.

\$139,000.

• C.

satisfy the need for full disclosure of all the facts relevant to a company's results and financial position.

• D.

Income Statement.

• 14.
Although businesses engage in a wide variety of activities, all of these activities can be categorized into three types. These three types of business activities are
• A.

operating, financing, and investing.

• B.

Accounts receivable

• C.

Building a manufacturing plant

• D.

Income Statement.

• 15.
Which of the following is an investing activity of a business?
• A.

Income Statement.

• B.

Selling stock to investors

• C.

satisfy the need for full disclosure of all the facts relevant to a company's results and financial position.

• D.

Building a manufacturing plant

• 16.
Which of the following is a financing activity of a business?
• A.

Selling stock to investors

• B.

Building a manufacturing plant

• C.

Assets increase and owners' equity increases

• D.

Assets increase and owners' equity increases

• 17.
Which of the following is an operating activity of a business?
• A.

Selling product for cash

• B.

Assets increase and owners' equity increases

• C.

Building a manufacturing plant

• D.

A debit

• 18.
Bart invested \$15,000 in his business.  How does this affect the accounting equation?
• A.

Factory managers supervising production line workers for Westinghouse

• B.

Provide information for decision making

• C.

to those willing to spend the time to understand it.

• D.

Assets increase and owners' equity increases

• 19.
Services are provided for customers and they are sent bills for the amount they owe.  How does this affect the accounting equation?
• A.

to those willing to spend the time to understand it.

• B.

Assets increase and owners' equity increases

• C.

\$15,000.

• D.

\$139,000.

• 20.
An entry made to the left side of an account is called
• A.

A debit

• B.

operating, financing, and investing.

• C.

Income Statement.

• D.

satisfy the need for full disclosure of all the facts relevant to a company's results and financial position.

• 21.
An entry made to the right side of an account is called a
• A.

satisfy the need for full disclosure of all the facts relevant to a company's results and financial position.

• B.

Income Statement.

• C.

operating, financing, and investing.

• D.

Credit

• 22.
The process of recording the economic effects of business transactions in a book of original entry is called
• A.

Accounts receivable; accounts payable

• B.

Journalizing

• C.

A double-entry system

• D.

operating, financing, and investing.

• 23.
The system of accounting in which there are at least two accounts affected in every transaction so that the accounting equation stays in balance is called
• A.

A double-entry system

• B.

Journalizing

• C.

A list of accounts and their balances (used to prove the equality of debits and credits).

• D.

Accounts receivable; accounts payable

• 24.
A trial balance is
• A.

Accounts receivable; accounts payable

• B.

Objective; verifiable.

• C.

A double-entry system

• D.

A list of accounts and their balances (used to prove the equality of debits and credits).

• 25.
If the business has an _________ from a customer, then the customer has an ________ to the business
• A.

Objective; verifiable.

• B.

A list of accounts and their balances (used to prove the equality of debits and credits).

• C.

Accounts receivable; accounts payable

• D.

earned; when the costs are incurred.

Related Topics