ACC 231 Final Exam Questions with
complete solution 2025/2026
Liabilities are defined as: - correct answer ✔Amounts owed to lenders or debtors
Assets are defined as: - correct answer ✔Economic resources of a company
Which of the following does NOT describe Stockholders' Equity? - correct answer ✔Money lent to a
business
Which of the following is NOT an asset? - correct answer ✔Net Income
Net Income is Defined as: - correct answer ✔Revenue - expenses
What do we call amounts of money borrowed from lenders? - correct answer ✔liabilites
Stockholders Equity represents: - correct answer ✔an initial investment of cash by its owners &
retention of profits by a firm
T or F? A business may either be for-profit or non-profit - correct answer ✔True
T or F? A business with one owner is called a sole proprietorship and it must be a service business? -
correct answer ✔False
T or F? Shareholders must pay income tax on the dividends they have received from a corporation? -
correct answer ✔True
, T or F? A LLC is a legal entity like a corporation, but the income is taxed like a sole proprietorship or
partnership? - correct answer ✔True
Which of the following is a disadvantage of the corporate form of business? - correct answer ✔Double
Taxation
Which type of organization has stockholders? - correct answer ✔A corporation
Which of the following business forms is similar to a corporation in regard to owner liability? - correct
answer ✔LLC
Ronald opens his business by investing $12,000. How does this affect the accounting equation? - correct
answer ✔Increase in Assets, Increase in Stockholder's Equity
Torina borrowed money for her business from a local bank, what accounts will be affected? - correct
answer ✔Cash and Notes Payable
An increase in revenues would have what affect on the accounting equation? - correct answer
✔Increase Stockholder's Equity
A company has liabilities of $23,800 and Stockholder's Equity of $56,900. How much does the company
have in assets? - correct answer ✔$80,700
Every entry in the general journal should include all but the following: - correct answer ✔the balance of
the accounts affected
Where is the best place for a company's accountant to find the info necessary to review activity in the
cash account - correct answer ✔General Ledger
complete solution 2025/2026
Liabilities are defined as: - correct answer ✔Amounts owed to lenders or debtors
Assets are defined as: - correct answer ✔Economic resources of a company
Which of the following does NOT describe Stockholders' Equity? - correct answer ✔Money lent to a
business
Which of the following is NOT an asset? - correct answer ✔Net Income
Net Income is Defined as: - correct answer ✔Revenue - expenses
What do we call amounts of money borrowed from lenders? - correct answer ✔liabilites
Stockholders Equity represents: - correct answer ✔an initial investment of cash by its owners &
retention of profits by a firm
T or F? A business may either be for-profit or non-profit - correct answer ✔True
T or F? A business with one owner is called a sole proprietorship and it must be a service business? -
correct answer ✔False
T or F? Shareholders must pay income tax on the dividends they have received from a corporation? -
correct answer ✔True
, T or F? A LLC is a legal entity like a corporation, but the income is taxed like a sole proprietorship or
partnership? - correct answer ✔True
Which of the following is a disadvantage of the corporate form of business? - correct answer ✔Double
Taxation
Which type of organization has stockholders? - correct answer ✔A corporation
Which of the following business forms is similar to a corporation in regard to owner liability? - correct
answer ✔LLC
Ronald opens his business by investing $12,000. How does this affect the accounting equation? - correct
answer ✔Increase in Assets, Increase in Stockholder's Equity
Torina borrowed money for her business from a local bank, what accounts will be affected? - correct
answer ✔Cash and Notes Payable
An increase in revenues would have what affect on the accounting equation? - correct answer
✔Increase Stockholder's Equity
A company has liabilities of $23,800 and Stockholder's Equity of $56,900. How much does the company
have in assets? - correct answer ✔$80,700
Every entry in the general journal should include all but the following: - correct answer ✔the balance of
the accounts affected
Where is the best place for a company's accountant to find the info necessary to review activity in the
cash account - correct answer ✔General Ledger
