Accounting Final Exam Questions: Multiple Choice

Summary

Accounting covers how businesses track money. Students get help with multiple choice questions on topics like owner's equity, assets, liabilities, inventory, depreciation, and partnerships.

Owner's Equity and Assets

Owner's equity increases through investments. A small business might be a proprietorship. Assets have debit and credit sides. The ledger follows financial statement order.

Inventory and Sales

Inventory is goods a company expects to sell. It is a current asset. Sales returns show possible problems with orders or goods. Inventory is valued at cost, not selling price.

Journals and Cash

Journals record transactions. Purchases and sales journals have common entries. Cash equivalents are short-term investments. Petty cash funds need regular replenishment.

Depreciation and Liabilities

Depreciation spreads the cost of assets over time. Land acquisition costs include extra fees. Warranties and paid leave are liabilities. Companies pay current liabilities from current assets.

Key terms

Owner's equity

The owner's share of the business, increased by investments.

Proprietorship

A business owned and run by one person.

Current assets

Assets a company expects to use or sell within a year.

Inventory

Goods a company has for sale.

Depreciation

The process of allocating the cost of an asset over its useful life.

Liabilities

Amounts a company owes to others.

Questions this document helps with

• What increases a business owner's equity?
• How is inventory valued on a balance sheet?
• What are the types of liabilities on a balance sheet?

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