Accounting Practice MCQs CS Set 5

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(6) Users of accounting information include:

(a) The tax authorities

(b) Investors

(c) Creditors

(d) All of these

Answer. (d)

(7) The business form(s) in which the owner(s) is (are) personally liable is (are) the:

(a) Partnership only

(b) Proprietorship

(c) Corporation only

(d) Partnership and proprietorship

(e) None of these

Answer. (d)

(8) The investment of personal assets by the owner:

(a) Increases total assets and increases owner’s equity

(b) Increases total assets only

(c) Has no effect on assets but increases owner’s equity

(d) Increase assets and liabilities

(e) None of these

Answer. (a)

(9) All of the following are forms of organizations except:

(a) Proprietorship

(b) Corporation

(c) Retailer

(d) Partnership

(e) None of these

Answer. (c)

(10) Economic resources of a business that are expected to be of benefit in the future are referred to as: (a) Liabilities

(b) Owner’s equity

(c) Withdrawals

(d) Assets

(e) None of these

Answer. (d)

(11) An owner investment of land into the business would:

(a) Decrease withdrawals

(b) Increase liabilities

(c) Increase owner’s equity

(d) Decrease assets

(e) None of these

Answer. (c)

(12) A cash purchase of supplies would:

(a) Decrease owner’s equity

(b) Increase liabilities

(c) Have no effect on total assets

(d) None of these

Answer. (c)

(13) An owner investment of each into the business would:

(a) Increase assets

(b) Decrease liabilities

(c) Increase withdrawals

(d) Decrease owner’s equity

(e) None of these

Answer. (a)

(14) The payment of rent each month for office space would:

(a) Decrease total assets

(b) Increase liabilities

(c) Increase owner’s equity

(d) None of these

Answer. (a)

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