Basic Arithmetic Quiz
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.
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