Small Business Accounting
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A quiz to review the basic concepts of Small Business Accounting. The online video course for this quiz is free. CLICK HERE to register.
- 1.Which of the following is considered an external user of accounting?
- A.
Managers of a corporation
- B.
Employees
- C.
Customers
- D.
Supervisors of a business
- 2.In the basic accounting equation, Assets= Liabilities + ________?
- A.
Long - term investments
- B.
Current assets
- C.
Stockholders’ Equity
- D.
Retained Earnings
- 3.Joe is a manager of a local business. He is faced with an ethical dilemma in the accounting department. According to the three steps to follow when facing ethical dilemmas, which of the following is NOT a step he should follow to analyze the situation?
- A.
Recognize the ethical situation and the issues involved
- B.
Contact the head supervisor and ask for help
- C.
Identify the principal elements in the situation
- D.
Identify all alternatives and how they affect stakeholders
- 4.Which of the following is a financial statement used to indicate how successfully the business performed during a period of time?
- A.
Income Statement
- B.
Retained Earnings Statement
- C.
Statement of Cash flows
- D.
Balance Sheet
- 5.Which of the following is NOT one of the 3 main business activities?
- A.
Financing
- B.
Investing
- C.
Advertising
- D.
Operating
- 6.During 2011, Softball Kingdom had its assets decrease $50,000. Which of the following transactions would ensure that the basic account equation would balance?
- A.
A decrease in liabilities of $40,000
- B.
An increase in assets of $50,000
- C.
A decrease of assets of $50,000
- D.
An increase in liabilities of $30,000
- 7.In 2013, XYZ Inc had sales revenues of $400,000, costs of goods sold: $310,000, and operating expenses of $60,000. What is the gross profit?
- A.
$30,000
- B.
$340,000
- C.
$90,000
- D.
$400,000
- 8.Which of the following is NOT a measure of liquidity?
- A.
Debt to total assets ratio
- B.
Working Capital
- C.
Current Ratio
- D.
Current cash debt coverage
- 9.Which of the following is a characteristic of a corporation?
- A.
Easy to start - up
- B.
Owned by 1 individual, or a small group of individuals
- C.
Separate legal existence
- D.
Liability is tied to a single individual or small group of individuals
- 10.Which of the following is a liabilities account?
- A.
Current Assets
- B.
Long - term investments
- C.
Property, plant, equipment
- D.
Mortgages Payable
- 11.
- A.
Journal entries show the complete effect of a transaction
- B.
Journal entries show profitability of the company as an overall unit
- C.
Journal entries provide a chronological order of transactions
- D.
Journal entries prevent all accounting errors
- 12.Which of the following is an expense account?
- A.
Common Stock
- B.
Retained Earnings
- C.
Rent
- D.
Dividends
- 13.Which of the following is included in the content for reports for Managerial Accounting?
- A.
Relevant data for each sub-unit of the company
- B.
GAAP Accounting
- C.
Double entry accounting and costs
- D.
Condensed financial information for the company as a whole
- 14.Which of the following is NOT considered a primary management function?
- A.
Financing
- B.
Planning
- C.
Directing
- D.
Controlling
- 15.What are the three components of manufacturing costs?
- A.
Direct Labor, Direct Materials, Building Rental
- B.
Direct Materials, Direct Labor, Manufacturing Overhead
- C.
Manufacturing Overhead, Direct Labor, Works in Process
- D.
Direct Materials, Cost of Goods Sold, Direct Labor
- 16.Which of the following is a period cost?
- A.
Selling Expenses
- B.
Direct Materials
- C.
Direct Labor
- D.
Manufacturing Overhead
- 17.Which of the following is NOT a type of cost?
- A.
Fixed
- B.
Mixed
- C.
Variable
- D.
Percentage
- 18.Which of the following is typically the budget that is prepared first?
- A.
Production Budget
- B.
Sales Budget
- C.
Direct Materials Budget
- D.
Manufacturing Overhead Budget
- 19.Which of the following is NOT a reason a company would hold Treasury Stock for future use?
- A.
To reissue the shares to officers and employees
- B.
To have additional shares available in order to acquire another company
- C.
To increase trading of the company’s stock
- D.
To decrease earnings per share
- 20.There are three requirements necessary for a company to pay out dividends. They are:
- A.
Retained Earnings, Adequate Cash, Declared Dividends
- B.
Retained Earnings, Adequate Cash, Stockholders’ Equity
- C.
Adequate Cash, High Liquidity, Low Liabilities
- D.
Stockholders’ Equity, Low Liquidities, Retained Earnings
- 21.How often are reports created in managerial accounting?
- A.
Quarterly
- B.
As needed by management
- C.
Annually
- D.
Weekly
- 22.Company XYZ Inc has variable costs associated with delivering widgets to customers. In December, delivery driving went up 30%. Total variable costs for December increased by:
- A.
10%
- B.
20%
- C.
30%
- D.
Nothing
- 23.All of the following are benefits of budgeting EXCEPT:
- A.
It creates incentives for managers to be rewarded
- B.
It requires management to plan ahead
- C.
It gives definite objectives for all levels in the company
- D.
It creates an early warning system to prevent potential problems
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