AFSP EXAM REVIEW QUESTIONS AND ANSWERS

AFSP EXAM REVIEW QUESTIONS AND ANSWERS
Which of the forms of business organizations is a tax-paying entity? - CORRECT
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: - CORRECT ANSWER✅✅Double-entry
accounting system



In the case of a corporation, stockholders have personal obligation for the business debts? T/F -
CORRECT ANSWER✅✅False



All increases to equity accounts are credit entries while all decreases are debit entries. T/F - CORRECT
ANSWER✅✅True



Debits are listed before credits in the journal but credits are indented and not debits. T/F - CORRECT
ANSWER✅✅True



Every transaction involves at most two accounts. T/F - CORRECT ANSWER✅✅False



A farmer borrowed money from the farm credit service. The 2 accounts involved are: - CORRECT
ANSWER✅✅Asset (cash) and Liability (Notes Payable)



The business records of a sole proprietorship should include the proprietor's finances. T/F - CORRECT
ANSWER✅✅True



Assets include cash, land, and accounts payable. T/F - CORRECT ANSWER✅✅False



The two main components of stockholders' equity are paid-in capital and dividends. T/F - CORRECT
ANSWER✅✅False