MBA 510 ACCOUNTING
EXAM 1 PRACTICE TEST
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
All of the following are part of the FASB conceptual framework: (Select all that apply). -
ANS-- Objectives
- Recognition and measurement
- Elements
- Qualitative characteristics
Which of the following statements describes the effect of expenses on equity? - ANS-
Expenses cause equity to decrease
An employee that is having trouble paying his personal bills might exhibit the
following fraud factor: - ANS-Pressure
What are Generally Accepted Accounting Principles? - ANS-The concepts and rules that
govern financial accounting practice.
The ______ recognition principle states that revenue is recognized when goods or
services are provided to customers and at an amount expected to be received. - ANS-
revenue
, Jackson's Programming paid its June rent of $500 cash. Demonstrate how to use the
accounting equation to record the transaction by completing the following sentence.
Jackson would decrease _____ and increase ________ in the accounting equation - ANS-
cash, expenses
Given the accounts, choose all of the ones that would affect equity - ANS-- common
stock
- dividends
- revenues
- expenses
Jackson's Catering Company provided cookies worth $3,000 to the local college. The
college paid immediately. Record this transaction in Jackson's accounting equation by:
- ANS-increasing Cash; increasing Revenues
Identify the correct definition of an asset: - ANS-An asset is a resource that a business
owns or controls
Equity is composed of contributed capital and ______ - ANS-retained earnings
Which list of accounts below, identifies only accounts that would appear on a balance
sheet. - ANS-Common stock, equipment, accounts payable
The FASB conceptual framework consists of all of the following except: - ANS-concepts
Sally Smith decided to start a sea shell business organized as a corporation. Her initial
investment in the business consisted of $10,000 in cash in exchange for common
stock. Record this transaction in the accounting equation of the new business by: -
ANS-increasing Cash; increasing Common Stock
On 8/1, supplies costing $500 were purchased on credit. Record this transaction in the
accounting equation by: - ANS-increasing Supplies, and increasing Accounts Payable
EXAM 1 PRACTICE TEST
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
All of the following are part of the FASB conceptual framework: (Select all that apply). -
ANS-- Objectives
- Recognition and measurement
- Elements
- Qualitative characteristics
Which of the following statements describes the effect of expenses on equity? - ANS-
Expenses cause equity to decrease
An employee that is having trouble paying his personal bills might exhibit the
following fraud factor: - ANS-Pressure
What are Generally Accepted Accounting Principles? - ANS-The concepts and rules that
govern financial accounting practice.
The ______ recognition principle states that revenue is recognized when goods or
services are provided to customers and at an amount expected to be received. - ANS-
revenue
, Jackson's Programming paid its June rent of $500 cash. Demonstrate how to use the
accounting equation to record the transaction by completing the following sentence.
Jackson would decrease _____ and increase ________ in the accounting equation - ANS-
cash, expenses
Given the accounts, choose all of the ones that would affect equity - ANS-- common
stock
- dividends
- revenues
- expenses
Jackson's Catering Company provided cookies worth $3,000 to the local college. The
college paid immediately. Record this transaction in Jackson's accounting equation by:
- ANS-increasing Cash; increasing Revenues
Identify the correct definition of an asset: - ANS-An asset is a resource that a business
owns or controls
Equity is composed of contributed capital and ______ - ANS-retained earnings
Which list of accounts below, identifies only accounts that would appear on a balance
sheet. - ANS-Common stock, equipment, accounts payable
The FASB conceptual framework consists of all of the following except: - ANS-concepts
Sally Smith decided to start a sea shell business organized as a corporation. Her initial
investment in the business consisted of $10,000 in cash in exchange for common
stock. Record this transaction in the accounting equation of the new business by: -
ANS-increasing Cash; increasing Common Stock
On 8/1, supplies costing $500 were purchased on credit. Record this transaction in the
accounting equation by: - ANS-increasing Supplies, and increasing Accounts Payable
