AFSP Exam With 125 Questions and answers
Newest RATED A+ 2025/26
Which of the forms of business organizations is a tax-paying entity? - answer-
Corporation
For every debit entry to an account or set of accounts, there is an equal amount of
credit to an account or set of accounts. This system of transaction is known as: -
answer- Double-entry accounting system
In the case of a corporation, stockholders have personal obligation for the business
debts? T/F - answer- False
All increases to equity accounts are credit entries while all decreases are debit entries.
T/F - answer- True
Debits are listed before credits in the journal but credits are indented and not debits. T/F
- answer- True
Every transaction involves at most two accounts. T/F - answer- False
A farmer borrowed money from the farm credit service. The 2 accounts involved are: -
answer- Asset (cash) and Liability (Notes Payable)
The business records of a sole proprietorship should include the proprietor's finances.
T/F - answer- True
Assets include cash, land, and accounts payable. T/F - answer- False
The two main components of stockholders' equity are paid-in capital and dividends. T/F
- answer- False
A limited liability partner and a general partner have unlimited liability. T/F - answer-
False
In a partnership, income and losses flow through to __________ - answer- partners
The owners of limited liability companies are known as ___________ - answer-
members
In order of preperation, the first financial statement to be prepared is the
________________ - answer- income statement
Newest RATED A+ 2025/26
Which of the forms of business organizations is a tax-paying entity? - answer-
Corporation
For every debit entry to an account or set of accounts, there is an equal amount of
credit to an account or set of accounts. This system of transaction is known as: -
answer- Double-entry accounting system
In the case of a corporation, stockholders have personal obligation for the business
debts? T/F - answer- False
All increases to equity accounts are credit entries while all decreases are debit entries.
T/F - answer- True
Debits are listed before credits in the journal but credits are indented and not debits. T/F
- answer- True
Every transaction involves at most two accounts. T/F - answer- False
A farmer borrowed money from the farm credit service. The 2 accounts involved are: -
answer- Asset (cash) and Liability (Notes Payable)
The business records of a sole proprietorship should include the proprietor's finances.
T/F - answer- True
Assets include cash, land, and accounts payable. T/F - answer- False
The two main components of stockholders' equity are paid-in capital and dividends. T/F
- answer- False
A limited liability partner and a general partner have unlimited liability. T/F - answer-
False
In a partnership, income and losses flow through to __________ - answer- partners
The owners of limited liability companies are known as ___________ - answer-
members
In order of preperation, the first financial statement to be prepared is the
________________ - answer- income statement
