Question

QUESTION 1

The ownership of a corporation is represented by:

		shares of stock.
		the owner's capital account.
		the revenue account.
		cash in bank account.

QUESTION 2

How many classifications does a Capital Stock Account have?

		One
		Two
		Three
		Four

  

QUESTION 3

The equity contributed by stockholders and equity earned through business profits represent the stockholders' equity for a:

		partnership firm.
		sole proprietorship.
		corporation.
		none of these.

QUESTION 4

Retained earnings are a part of a/an:

		asset account.
		permanent account.
		stockholders' equity account.
		temporary account.

QUESTION 5

How many sections does an Income Statement have?

		Two
		Three
		Four
		Five

QUESTION 6

Net sales are related to the:

		net income section.
		gross profit on sales section.
		revenue section.
		cost of merchandise sold section.

  

QUESTION 7

Sales discount and sales return and allowance are:

		revenue accounts.
		contra revenue accounts.
		permanent accounts.
		contra expenses accounts.

QUESTION 8

The total cost related to merchandise purchases during an accounting period is the:

		net purchase.
		cost of merchandise sold.
		cost of merchandise available for sale.
		beginning merchandise inventory.

  

QUESTION 9

The gross profit on sale is $65,000, and operating expenses is $35,000. What will be the operating profit?

		$65,000
		$35,000
		$100,000
		$30,000

QUESTION 10

A balance sheet has the following sections:

		Assets, liabilities, and stockholders' equity.
		Income, expenses, and stockholders' equity.
		Assets, liabilities, and income.
		Operating income, operating expenses, and stockholders' equity.

QUESTION 11

A cash flow statement is used to assess the:

		net increase or decrease of cash.
		net increases of cash only.
		net decrease of cash only.
		net profit or loss of business.

Answer 1

Ans 1 shares of stock.

Investment in Shares of company define ownership of company. Higher shareholding gives higher rights and person having maximum shares is considered to be the owner of the firm.

Ans 4 stockholders' equity account

Stockholder's Equity includes Share capital and Retained earnings.

Ans 10 Assets, liabilities, and stockholders' equity.

Income and Expenses are part of Income & Expenditure account and not of Balance Sheet.

Ans 11 net increase or decrease of cash.

Cash Flow statement tells the position of cash inflows and outflows in three activities.