A corporation is a business that is legally separate and distinct from its owners.

1, A corporation is a business that is legally separate and
distinct from its owners. True False 2, Financial accounting provides
information to all users, while the main focus for managerial
accounting is to provide information to the management. Financial accounting provides
information to all users, while the main focus for managerial
accounting is to provide information to the management. True False 3, Proprietorships are owned by
one owner and provide only services to their customers. Proprietorships are owned by
one owner and provide only services to their customers. True False 4, If a building is appraised for
$85,000, offered for sale at $90,000, and the buyer pays $80,000
cash for it, the buyer would record the building at
$85,000. If a building is appraised for
$85,000, offered for sale at $90,000, and the buyer pays $80,000
cash for it, the buyer would record the building at
$85,000. True False 5, Assets are Assets are : financed by the owner and/or creditors : the same as expenses because they are acquired with cash : equal to liabilities less owner’s equity : always lower than liabilities 6, A cash payment is recorded in
the cash account as A cash payment is recorded in
the cash account as : either a debit or a credit : a credit : neither a debit or a credit : a debit 7, Office supplies purchased by
Janer’s Cleaning Service on account were returned. Which of the
following entries for Janer’s Cleaning Service records this
transaction? Office supplies purchased by
Janer’s Cleaning Service on account were returned. Which of the
following entries for Janer’s Cleaning Service records this
transaction? : Office Supplies, debit; Accounts Receivable, credit : Cash, debit; Office Supplies, credit : Office Supplies, debit; Accounts Payable, credit : Accounts Payable, debit; Office Supplies, credit 8, Which of the following entries
records the receipt of cash for two months’ rent? The cash was
received in advance of providing the service. Which of the following entries
records the receipt of cash for two months’ rent? The cash was
received in advance of providing the service. : Cash, debit; Rent Expense credit. : Cash, debit; Unearned Rent, credit. : Prepaid Rent, debit; Rent Revenue, credit. : Cash, debit; Prepaid Rent, credit. 9, Which of the following will
increase owner’s equity? Which of the following will
increase owner’s equity? : cash is received from customers on account : the owner draws money for personal use : revenues > expenses. : expenses > revenues. 10, The purchase of supplies on
account was recorded and posted as a debit to Supplies for $500 and
a credit to Accounts Receivable for $500. The correcting entry
would include a: The purchase of supplies on
account was recorded and posted as a debit to Supplies for $500 and
a credit to Accounts Receivable for $500. The correcting entry
would include a: : credit to Accounts Receivable for $1,000 : credit to Accounts Receivable for $500 : credit to Accounts Payable for $1,000 : credit to Accounts Payable for $500

Answers
1, A corporation is a business that is legally separate and
distinct from its owners.
Answer: True. Corporation has the distinct legal entity of its own
and its owners (stockholders) are different.
2, Financial accounting provides information to all users, while
the main focus for managerial accounting is to provide information
to the management.
Answer: True. Financial accounting statements are issued as
public documents and can be viewed and analysed by public at large.
But managerial accounting is only for internal management
purposes.
3, Proprietorships are owned by one owner and provide only
services to their customers.
Answer: True. The sole proprietor is the owner and conducts the
business all alone.
4, If a building is appraised for $85,000, offered for sale at
$90,000, and the buyer pays $80,000 cash for it, the buyer would
record the building at $85,000.
Answer: False. The building will be recorded at the price paid
to acquire that is $ 80000
5, Assets are
Answer:: financed by the owner and/or creditors
6, A cash payment is recorded in the cash account as
Answer:: a credit. Cash account is credited when cash is paid
and is debited when cash is received.
7, Office supplies purchased by Janer’s Cleaning Service on
account were returned. Which of the following entries for Janer’s
Cleaning Service records this transaction?
Answer: Accounts Payable, debit; Office Supplies, credit. This
is because when the supplies would have purchased earlier, the
supplies account would have been debited and accounts payable would
have been credited. The same will be reversed when returned.
8, Which of the following entries records the receipt of cash
for two months’ rent? The cash was received in advance of providing
the service.
Answer: : Cash, debit; Unearned Rent, credit. Unearned Rent is
to be credited because its an ‘advance’ receipt and services
against those rents have not yet been provided.
9, Which of the following will increase owner’s equity?
Answer: revenues > expenses. This means that there is Net
Income. Net Income increases Equity.
10, The purchase of supplies on account was recorded and posted
as a debit to Supplies for $500 and a credit to Accounts Receivable
for $500. The correcting entry would include a:
Answer: credit to Accounts Payable for $1,000. This is because
the supplies are purchased ‘on account’. Hence the same will have
to recorded as a liability (accounts Payable)

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