The type of business organization that can continue indefinitely is known as

. The type of business organization that can continue indefinitely is known as a:a. sole proprietorshipb. partnershipc. corporationd. None of the above.2. The purpose of the accounting process is to provide financial information about:a. sole proprietorshipsb. small businessesc. large corporationsd. All of the above.3. The cash purchase of a truck was recorded as a purchase on credit. Due to this error:a. assets were overstatedb. liabilities were overstatedc. answers a and b are both correctd. None of the above.4. Which of the following would cause one asset to increase and another asset to decrease?a. The owner invested cash in the business.b. The business paid a creditor.c. The business incurred an expense on credit.d. The business bought supplies for cash.5. Which accounts are affected when the company buys supplies on account?a. assets and capitalb. liabilities and capitalc. assets and liabilitiesd. None of the above.6. Which accounts are affected when the company provides services to a cash customer?a. assets and capitalb. liabilities and capitalc. assets and revenued. None of the above.Unit 1 Examination 30 BAM 110 Introduction to Accounting7. Which accounts are affected when the owner withdraws cash from the business?a. assets and withdrawalsb. liabilities and capitalc. assets and liabilitiesd. None of the above.8. A chart of accounts:a. is set up in alphabetical orderb. includes account balancesc. is a listing of all the accounts used by a companyd. All of the above.9. Accounts payable had a normal starting balance of $800. There were debit postings of $600and credit postings of $300 during the month. The ending balance is:a. $500 creditb. $1,000 debitc. $500 debitd. $1,000 credit10. The beginning balance in the computers account was $2,000. The company purchased anadditional $1000 worth of computers. The balance in the account is:a. debit of $2,000b. credit of $3,000c. debit of $3,000d. credit of $2,00011. A list of all the accounts from the ledger with their ending balances is called a:a. normal balanceb. trial balancec. chart of accountsd. footing12. Which of the following is prepared first?a. balance sheetb. expense sheetc. statement of owner’s equityd. income statementUnit 1 Examination 31 BAM 110 Introduction to Accounting13. Which type of account would not be reported on the income statement?a. revenueb. expensesc. liabilitiesd. None of the above.14. The left column of a financial statement is often used to:a. subtotal numbersb. show creditsc. show totalsd. show debits15. The beginning capital account would appear on which financial statement?a. statement of owner’s equityb. balance sheetc. income statementd. None of the above.16. The income statement contains:a. liabilitiesb. revenuesc. assetsd. Both b and c are correct.17. Net income or net loss for a period is calculated by which of the following formula?a. total revenues – total withdrawalsb. total revenues – total expenses – total withdrawalsc. total revenues – total expensesd. total revenues – total expenses + capital18. The process that begins with recording business transactions and includes the completion ofthe financial statements is the:a. calendar yearb. natural business yearsc. fiscal yeard. accounting cycleUnit 1 Examination 32 BAM 110 Introduction to Accounting19. The twelve-month period a business chooses for its accounting period is a(n):a. calendar yearb. accounting periodc. fiscal yeard. accounting cycle20. If cash has been debited, it is likely that:a. the owner made an investmentb. a charge customer made a paymentc. the business borrowed cash from the bankd. All of the above.21. If prepaid rent has been debited, it is likely that:a. the rent was paid for three months in advanceb. a bill for the past month’s rent was receivedc. this month’s rent was paidd. All of the above.22. Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledgermeans:a. all of the information from the journal was correctly transferred to the ledgerb. all accounts have their correct balances in the ledgerc. only the ledger is accurate; the journal may be incorrectd. only that the debit dollar amounts equal the credit dollar amounts23. In preparing the trial balance of the K&L’s Bridal Service, the withdrawal account (which had anormal balance in the general ledger) was listed as a credit for $400. What will be thedifference between the debit and credit sides of the trial balance?a. $150b. $200c. $300d. $80024. The trial balance:a. includes all accounts with a balance in the ledgerb. includes assets, liabilities, capital, withdrawals, revenues and expensesc. ensures that debits equal creditsd. All of the above.Unit 1 Examination 33 BAM 110 Introduction to Accounting