Accounting Test 1 prep 210+ (Latest Edition) 100% Verified Q&A + Answer Key Solutions

ACCOUNTING TEST 1 PREP

210+ (Latest 2025-2026 Edition) 100%
Verified Q&A + Answer Key Solutions


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,Question 1
An income statement reports:
Correct Answer
Expenses, revenues, net income or loss

Question 2
The primary functions of accounting are to:
Correct Answer
measure a company's activities.

communicate information to decision makers.

Question 3
True or false: The fundamental activities of a business are selling activities and marketing activities.
Correct Answer
False. The fundamental activities are financing, investing, and operating activities.

Question 4
The purpose of a(n) ________ _________ is to report the profit-generating activities of a company over an interval of time
Correct Answer
income statement

Question 5
________ Statements represent a company's primary means of communicating information to external users
Correct Answer
financial

Question 6
When revenues are greater than expenses, a company has net _________, whereas when revenues are less than
expenses, a company has a net __________ .
Correct Answer
gain; loss

Question 7
The four primary financial statements published to provide information to external users include which of the
following?
Correct Answer
1. Statement of Stockholders' Equity
2. Income Statement
3. Balance Sheet
4. Statement of Cash Flows


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,Question 8
Where is the time period covered by the income statement found?
Correct Answer
In the heading

Question 9
The financial statement that summarizes revenues and expenses for a period of time is the _________ __________
Correct Answer
income statement


Question 10
Which of the following line items appear on an income statement? for example
Correct Answer
Service revenue
Salaries expense
Supplies expense

- just revenues and expenses (vary)

Question 11
The system that maintains records of a company's operations and then communicates that information to decision
makers is referred to as ____________
Correct Answer
accounting

Question 12
The purpose of an income statement is to:
Correct Answer
summarize the profit-generating activities that occurred during a particular reporting period

Question 13
If revenues are less than expenses, a company has
Correct Answer
net loss

Question 14
Stockholders' equity arises primarily from amounts invested by shareholders and amounts ______.
Correct Answer
earned by the corporation




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, Question 15
The heading of an income statement should include which of the following?
Correct Answer
The title of the financial statement

The accounting period covered by the statement

The name of the business


Question 16
The accumulated net income earned since the inception of the corporation and not yet paid to shareholders is
referred to as _______ ________
Correct Answer
retained earnings

Question 17
Ending retained earnings is calculated as
Correct Answer
beginning retained earnings + net income - dividends

Question 18
Which of the following financial statements shows a company's financial position on a particular date?
Correct Answer
balance sheet

Question 19
Which of the following aspects relate to the information provided in an income statement?
Correct Answer
Ability to earn a profit from its operations during the current period

Question 20
The accounting equation is: Assets = _______ + Stockholders' Equity
Correct Answer
Liabilities




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