Accounting 28th Edition by Carl S. Warren,
Christine Jonick, Jennifer Schneider
📘 Accounting Practice Questions (Original)
1. What is accounting?
A. Recording only cash transactions
B. Identifying, recording, and communicating financial information
C. Managing company employees
D. Auditing financial statements
✅ Answer: B
2. Which of the following is an internal user of accounting information?
A. Customers
B. Government
C. Managers
D. Banks
✅ Answer: C
3. The primary purpose of accounting is to:
A. Calculate taxes
B. Provide financial information for decision-making
C. Detect fraud
D. Increase profits
✅ Answer: B
,4. Which financial statement reports assets, liabilities, and equity?
A. Income statement
B. Balance sheet
C. Statement of cash flows
D. Statement of owner’s equity
✅ Answer: B
5. Assets are best described as:
A. Amounts owed to others
B. Owner investments
C. Resources owned by a business
D. Business expenses
✅ Answer: C
6. Liabilities are:
A. Business resources
B. Owner claims
C. Amounts owed to creditors
D. Revenues earned
✅ Answer: C
7. Owner’s equity represents:
A. Total cash
B. Owner’s claim on assets
C. Business debts
D. Business expenses
✅ Answer: B
8. Which equation is correct?
, A. Assets = Liabilities − Equity
B. Assets = Liabilities + Equity
C. Equity = Assets + Liabilities
D. Assets = Revenue − Expenses
✅ Answer: B
9. Revenue is:
A. Money paid by the business
B. Cost of operating the business
C. Income earned from services or sales
D. Owner investment
✅ Answer: C
10. Expenses are:
A. Assets
B. Costs incurred to earn revenue
C. Owner withdrawals
D. Liabilities
✅ Answer: B
11. Which account increases owner’s equity?
A. Expenses
B. Withdrawals
C. Revenues
D. Liabilities
✅ Answer: C
12. Owner withdrawals decrease:
A. Assets only
B. Liabilities
Christine Jonick, Jennifer Schneider
📘 Accounting Practice Questions (Original)
1. What is accounting?
A. Recording only cash transactions
B. Identifying, recording, and communicating financial information
C. Managing company employees
D. Auditing financial statements
✅ Answer: B
2. Which of the following is an internal user of accounting information?
A. Customers
B. Government
C. Managers
D. Banks
✅ Answer: C
3. The primary purpose of accounting is to:
A. Calculate taxes
B. Provide financial information for decision-making
C. Detect fraud
D. Increase profits
✅ Answer: B
,4. Which financial statement reports assets, liabilities, and equity?
A. Income statement
B. Balance sheet
C. Statement of cash flows
D. Statement of owner’s equity
✅ Answer: B
5. Assets are best described as:
A. Amounts owed to others
B. Owner investments
C. Resources owned by a business
D. Business expenses
✅ Answer: C
6. Liabilities are:
A. Business resources
B. Owner claims
C. Amounts owed to creditors
D. Revenues earned
✅ Answer: C
7. Owner’s equity represents:
A. Total cash
B. Owner’s claim on assets
C. Business debts
D. Business expenses
✅ Answer: B
8. Which equation is correct?
, A. Assets = Liabilities − Equity
B. Assets = Liabilities + Equity
C. Equity = Assets + Liabilities
D. Assets = Revenue − Expenses
✅ Answer: B
9. Revenue is:
A. Money paid by the business
B. Cost of operating the business
C. Income earned from services or sales
D. Owner investment
✅ Answer: C
10. Expenses are:
A. Assets
B. Costs incurred to earn revenue
C. Owner withdrawals
D. Liabilities
✅ Answer: B
11. Which account increases owner’s equity?
A. Expenses
B. Withdrawals
C. Revenues
D. Liabilities
✅ Answer: C
12. Owner withdrawals decrease:
A. Assets only
B. Liabilities
