1. Which of the following is an internal event?
A. Caddie salaries are paid by a country club.
B. Dividends are distributed to a company's stockholders.
C. Potatoes used in a fast-food restaurant are purchased.
D. Products are transferred from the assembly area to the painting station.
2. Which of the following is not an external event?
A. A grocery store recognizes losses from spoilage.
B. A grocery store runs ads in a local newspaper.
C. A grocery store purchases produce from a local farmer.
D. A grocery store sells groceries to customers on credit.
3. A list of all asset, liability, equity, revenue, expense, and dividend accounts which are used by the company is called a:
A. general ledger.
B. general journal.
C. chart of accounts.
D. balance sheet.
4. Which of the following statements is true regarding economic events?
A. The signing of a service contract is an example of an external event that is recorded in the accounting records.
B. Every event which affects an entity can be identified from a source document.
C. All internal and external events must be measured with sufficient reliability.
D. External events involve exchanges between an entity and another entity outside the company.
5. In which order are the accounts listed in the chart of accounts?
A. Assets, expenses, liabilities, stockholders’ equity, revenues
B. Stockholders’ equity, assets, liabilities, revenues, expenses
C. Assets, liabilities, stockholders’ equity, revenues, expenses
D. Assets, liabilities, revenues, expenses, stockholders’ equity
6. What statement below best describes an Accounting Information System?
A. The system that identifies, records, summarizes, and communicates the various transactions of a company.
B. It is built to capture and report the effects of a company’s accounting transactions.
C. Each system in an organization can vary widely, ranging from a manual system to a highly complex electronic system.
D. All of the Above
7. A chart of accounts is:
A. the same as a balance sheet.
B. usually a listing of accounts in alphabetical order.
C. usually a listing of accounts in financial statement order.
D. used in place of a ledger.
8. Which of the following is an internal event for a business entity?
A. An attorney provides services for clients.
B. An attorney purchases computer equipment.
C. An attorney recorded depreciation on his computer equipment.
D. An attorney receives cash payments from clients who were billed for legal services.
9. The purchase of office equipment on credit has what effect on the accounting equation?
A. Assets and stockholders' equity decrease
B. Liabilities increase and stockholders' equity decreases
C. Assets and liabilities increase
D. Assets and liabilities decrease
10. The payment of employee salaries has what effect on the accounting equation?
A. Assets and stockholders' equity decrease
B. Liabilities and stockholders' equity decrease
C. Assets decrease and liabilities increase
D. Assets increase and liabilities decrease
