Quiz 1

5/17/2019 Chapter 1 - Multiple Choice - principlesofaccounting.
com
Chapter 1 - Multiple Choice
Text (http://principlesofaccounting.com/chapter-1/)
Problems (http://principlesofaccounting.com/chapter-1/problems/)
Goals Achievement (http://principlesofaccounting.com/quizzes/goals-achievement/)
Fill in the Blanks (http://principlesofaccounting.com/quizzes/chapter-1- ll-in-the-blank/)
Multiple Choice (http://principlesofaccounting.com/quizzes/chapter-1-multiple-choice/)
Glossary (http://principlesofaccounting.com/chapter-1/glossary/)
Results
 6 of 10 questions answered correctly
 Your time: 00:04:02
 You have reached 6 of 10 point(s), (60%)
VIEW QUESTIONS RESTART QUIZ
1. Question
The accounting profession can be divided into three major categories; speci cally, the practice of public accounting, private
accounting, and governmental accounting. A somewhat unique and important service of public accountants is:
(http://principlesofaccounting.com/chapter-1/accounting-information/)
Financial accounting. 
Managerial accounting.
Auditing. 
https://www.principlesofaccounting.com/quizzes/chapter-1-multiple-choice/ 1/10
5/17/2019 Chapter 1 - Multiple Choice - principlesofaccounting.com
Cost accounting.
INCORRECT 
Auditing, along with income tax and management advisory activities, are the major services offered by public
accountants. Managerial and cost accounting are generally regarded as private accounting functions. Public
accountants deal with nancial accounting issues, but “ nancial accounting” is more of a concept than a “service.”
2. Question
The primary private sector agency that oversees external nancial reporting standards is the:
(http://principlesofaccounting.com/chapter-1/accounting-information/)
Financial Accounting Standards Board. 

Federal Bureau of Investigation.
General Accounting O ce.
Internal Revenue Service.
CORRECT 
3. Question
Which of the following equations properly represents a derivation of the fundamental accounting equation?
(http://principlesofaccounting.com/chapter-1/accounting-equation/)
Assets + liabilities = owner's equity.
Assets = owner's equity.
Cash = assets.
Assets – liabilities = owner's equity. 
CORRECT 
4. Question
Wilson Company owns land that cost $100,000. If a “quick sale” of the land was necessary to generate cash, the company
feels it would receive only $80,000. The company continues to report the asset on the balance sheet at $100,000. Which of
the following concepts justi es this? (http://principlesofaccounting.com/chapter-1/accounting-information/)
The historical-cost principle. 

The value is tied to objective and veri able past transactions.
Neither of the above.
Both "a" and "b". 
INCORRECT 
Both of these concepts justify the continued reporting at $100,000, as this amount is an objective and veri able
historical-cost measurement.
5. Question
Retained earnings will change over time because of several factors. Which of the following factors would explain an
increase in retained earnings? (http://principlesofaccounting.com/chapter-1/ nancial-statements/)
Net loss.
Net income. 
Dividends.
Investments by stockholders. 
INCORRECT 
Net income would cause increases in retained earnings. In contrast, losses and dividends are factors that will cause
decreases in retained earnings. Investments by stockholders’ would cause an increase in capital stock, not retained
earnings.
6. Question
Which of these items would be accounted for as an expense? (http://principlesofaccounting.com/chapter-1/transactions/)
Repayment of a bank loan.
Dividends to stockholders.
The purchase of land.
Payment of the current period's rent. 
CORRECT 
7. Question
Which of the following transactions would have no impact on stockholders’ equity?
Purchase of land from the proceeds of a bank loan. 

Dividends to stockholders.
Net loss.
Investments of cash by stockholders.
CORRECT 
8. Question
Which of the following would not be included on a balance sheet? (http://principlesofaccounting.com/chapter-
1/accounting-equation/)
Accounts receivable.
Accounts payable.
Sales. 
Cash.
CORRECT 
9. Question
Remington provided the following information about its balance sheet. Based on the
information provided, how much are Remington’s liabilities?
$200.
$900.
$1,200. 
$1,700.
CORRECT 
10. Question
Gerald had beginning total stockholders’ equity of $160,000. During the year, total assets increased by $240,000 and total
liabilities increased by $120,000. Gerald’s net income was $180,000. No additional investments were made; however,
dividends did occur during the year. How much were the dividends? (http://principlesofaccounting.com/chapter-
1/accounting-equation/)
$20,000.
$60,000. 
$140,000. 
$220,000.
INCORRECT 
$60,000. Because total assets increased $240,000 and liabilities increased $120,000, the increase in equity must
have been $120,000 ($240,000 – $120,000). Net income increases equity ($180,000) and dividends decrease equity.
The increase in equity of $120,000 is therefore comprised of $180,000 in income (add) and $60,000 of dividends
(subtract).
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Additional Resources 
(//www.principlesofaccounting.com/illustrative-entries/)
Illustrative Entries
 Examples of journal entries for numerous sample transactions
(//www.principlesofaccounting.com/account-types/)
Account Types
 Typical nancial statement accounts with debit/credit rules and disclosure conventions
(//www.principlesofaccounting.com/glossary/)
Glossary
 Includes nancial and managerial terms
(//www.principlesofaccounting.com/time-value-money/)
Time Value of Money

 Future and present value tables
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5/17/2019 Chapter 1 - Multiple Choice - principlesofaccounting.

Chapter 1 - Multiple Choice

Goals Achievement (http://principlesofaccounting.com/quizzes/goals-achievement/)

Fill in the Blanks (http://principlesofaccounting.com/quizzes/chapter-1- ll-in-the-blank/)

Multiple Choice (http://principlesofaccounting.com/quizzes/chapter-1-multiple-choice/)

 Your time: 00:04:02

 You have reached 6 of 10 point(s), (60%)

VIEW QUESTIONS RESTART QUIZ

Financial Accounting Standards Board. 

General Accounting O ce.

Internal Revenue Service.

Assets + liabilities = owner's equity.

Assets = owner's equity.

Assets – liabilities = owner's equity. 

The historical-cost principle. 

Neither of the above.

Both "a" and "b". 

increase in retained earnings? (http://principlesofaccounting.com/chapter-1/ nancial-statements/)

Which of these items would be accounted for as an expense? (http://principlesofaccounting.com/chapter-1/transactions/)

Repayment of a bank loan.

The purchase of land.

Payment of the current period's rent. 

Which of the following transactions would have no impact on stockholders’ equity?

Purchase of land from the proceeds of a bank loan. 

Investments of cash by stockholders.

Which of the following would not be included on a balance sheet? (http://principlesofaccounting.com/chapter-

Click here to visit the bookstore and purchase principlesofaccounting.com textbooks!

Time Value of Money

Principlesofaccounting.com ™ Copyright © 2019. All rights reserved.

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