ACCOUNTING EXAM 1 PRACTICE QUESTIONS
WITH COMPLETE VERIFIED ANSWERS [
GRADED A+]
What is a correct form of the Accounting Equation? - ✔✔Assets - Liabilities =
Stockholder's Equity
What financial statement is typically prepared first? - ✔✔Income Statement
What is the equation for Retained Earnings? - ✔✔Net Income - Dividends
What financial statement is prepared for just a point in time? - ✔✔Balance
Sheet
©morren 2025/2026. Year published 2026.
,What group is known as the "enforcer" in regards to accounting standards for
public companies? - ✔✔SEC
What "PCAOB" stand for? - ✔✔Public Company Accounting Oversight Board
What was NOT one of the notable changes to the accounting profession as a
result of SOX?
a. Established the Committee on Accounting Procedure
b. Required audit partners to rotate every 5 years
c. CEO & CFO sign off on financial statements
d. Established the PCAOB - ✔✔Established the Committee on Accounting
Procedure
When was the AAA established? - ✔✔1916
Receiving cash from a previously billed customer would include: - ✔✔A credit
to accounts receivable
©morren 2025/2026. Year published 2026.
, When a company issues common stock to investors, what will occurs? - ✔✔An
increase to the company's common stock balance
Purchasing inventory on account would include: - ✔✔A credit to accounts
payable
The "Cost of Goods Sold" account shows up in what financial statement? -
✔✔income statement
What is the "normal balance" for expenses? - ✔✔Debit
Which of the following is NOT a temporary account?
a. Dividends
b. Rent Expense
c. Cash
d. Service Revenue - ✔✔c. Cash
©morren 2025/2026. Year published 2026.
WITH COMPLETE VERIFIED ANSWERS [
GRADED A+]
What is a correct form of the Accounting Equation? - ✔✔Assets - Liabilities =
Stockholder's Equity
What financial statement is typically prepared first? - ✔✔Income Statement
What is the equation for Retained Earnings? - ✔✔Net Income - Dividends
What financial statement is prepared for just a point in time? - ✔✔Balance
Sheet
©morren 2025/2026. Year published 2026.
,What group is known as the "enforcer" in regards to accounting standards for
public companies? - ✔✔SEC
What "PCAOB" stand for? - ✔✔Public Company Accounting Oversight Board
What was NOT one of the notable changes to the accounting profession as a
result of SOX?
a. Established the Committee on Accounting Procedure
b. Required audit partners to rotate every 5 years
c. CEO & CFO sign off on financial statements
d. Established the PCAOB - ✔✔Established the Committee on Accounting
Procedure
When was the AAA established? - ✔✔1916
Receiving cash from a previously billed customer would include: - ✔✔A credit
to accounts receivable
©morren 2025/2026. Year published 2026.
, When a company issues common stock to investors, what will occurs? - ✔✔An
increase to the company's common stock balance
Purchasing inventory on account would include: - ✔✔A credit to accounts
payable
The "Cost of Goods Sold" account shows up in what financial statement? -
✔✔income statement
What is the "normal balance" for expenses? - ✔✔Debit
Which of the following is NOT a temporary account?
a. Dividends
b. Rent Expense
c. Cash
d. Service Revenue - ✔✔c. Cash
©morren 2025/2026. Year published 2026.
