A.O.L. Exam QUESTIONS WITH
VERIFIED ANSWERS GRADED A+
PASSED 2025/2026
Which of the following is NOT a trait of a corporation?
a. Can be sued for all of the owner's assets
b. Can be owned by multiple people
c. Often subject to double taxation
d. Limits liability - correct answer ✔✔a. Can be sued for all of the owner's assets
Brown's Business is concerned that another company is trying to take it over, what can it do
prevent this from happening?
a. Repurchase some of its own shares of stock.
b. Sell all outstanding shares of stock.
c. Authorize additional shares of stock to be issued.
d. Create an IPO. - correct answer ✔✔a. Repurchase some of its own shares of stock.
Which of these statements about retained earnings is true?
a. Retained earnings are private and are not released to shareholders.
b. Retained earnings is not a good measure for shareholders to go by to see how much they'd
be entitled to.
c. Retained earnings shows shareholders how much money the company has.
d. Retained earnings is not important to shareholders. - correct answer ✔✔c. Retained earnings
shows shareholders how much money the company has.
,Income tax is paid based on the taxable income. In some cases, the taxable income is not known
until after the tax liability is due. What type of liability is this?
a. Estimated
b. Current
c. Predated
d. Nonexempt - correct answer ✔✔a. Estimated
Which of these bond types are bonds in which a portion of the outstanding bonds mature or
become due at several dates which typically fall in a series?
a. Serial bond
b. Unsecured bond
c. Convertible bond
d. Registered bond - correct answer ✔✔a. Serial bond
Which of the following statements is true regarding a callable bond?
a. A callable bond allows the issuer to call the investor about changes in the bond's contract.
b. A callable bond allows the issuer to repurchase the bond.
c. A callable bond allows the issuer to turn the bond into stock.
d. A callable bond allows the investor to sell the bond early. - correct answer ✔✔b. A callable
bond allows the issuer to repurchase the bond.
Susie is an accountant for XYZ Tech Firm, and she is preparing the post closing trial balance. She
goes to one of her co-workers to request the revenue and expense account balances to include
in her report. What will her co-worker tell her?
a. She will remind her that those do not belong in the report since they are temporary accounts.
b. She will give her the balances so she can transfer them over to the next accounting period.
c. She will remind her that those do not belong in the report since they are permanent
accounts.
, d. She will give her the balances as they are necessary to include in the report. - correct answer
✔✔a. She will remind her that those do not belong in the report since they are temporary
accounts.
What is the most common accounting method used by businesses?
a. Debit
b. Accrual
c. Cash
d. Ledger - correct answer ✔✔b. Accrual
Before you can complete the adjusted trial balance, you first have to create the _____.
a. cash flow statement
b. balance sheet
c. trial balance
d. statement of retained earnings - correct answer ✔✔c. trial balance
Expenses incurred to generate revenue must be recorded in the same time period as the
revenue it generates. Which principle is this?
a. Revenue principle
b. Concept principle
c. Matching principle
d. Monetary unit principle - correct answer ✔✔c. Matching principle
What is the formula for calculating interest?
a. I = P x R x T
b. I = P / R x T
c. I = P x R - T
VERIFIED ANSWERS GRADED A+
PASSED 2025/2026
Which of the following is NOT a trait of a corporation?
a. Can be sued for all of the owner's assets
b. Can be owned by multiple people
c. Often subject to double taxation
d. Limits liability - correct answer ✔✔a. Can be sued for all of the owner's assets
Brown's Business is concerned that another company is trying to take it over, what can it do
prevent this from happening?
a. Repurchase some of its own shares of stock.
b. Sell all outstanding shares of stock.
c. Authorize additional shares of stock to be issued.
d. Create an IPO. - correct answer ✔✔a. Repurchase some of its own shares of stock.
Which of these statements about retained earnings is true?
a. Retained earnings are private and are not released to shareholders.
b. Retained earnings is not a good measure for shareholders to go by to see how much they'd
be entitled to.
c. Retained earnings shows shareholders how much money the company has.
d. Retained earnings is not important to shareholders. - correct answer ✔✔c. Retained earnings
shows shareholders how much money the company has.
,Income tax is paid based on the taxable income. In some cases, the taxable income is not known
until after the tax liability is due. What type of liability is this?
a. Estimated
b. Current
c. Predated
d. Nonexempt - correct answer ✔✔a. Estimated
Which of these bond types are bonds in which a portion of the outstanding bonds mature or
become due at several dates which typically fall in a series?
a. Serial bond
b. Unsecured bond
c. Convertible bond
d. Registered bond - correct answer ✔✔a. Serial bond
Which of the following statements is true regarding a callable bond?
a. A callable bond allows the issuer to call the investor about changes in the bond's contract.
b. A callable bond allows the issuer to repurchase the bond.
c. A callable bond allows the issuer to turn the bond into stock.
d. A callable bond allows the investor to sell the bond early. - correct answer ✔✔b. A callable
bond allows the issuer to repurchase the bond.
Susie is an accountant for XYZ Tech Firm, and she is preparing the post closing trial balance. She
goes to one of her co-workers to request the revenue and expense account balances to include
in her report. What will her co-worker tell her?
a. She will remind her that those do not belong in the report since they are temporary accounts.
b. She will give her the balances so she can transfer them over to the next accounting period.
c. She will remind her that those do not belong in the report since they are permanent
accounts.
, d. She will give her the balances as they are necessary to include in the report. - correct answer
✔✔a. She will remind her that those do not belong in the report since they are temporary
accounts.
What is the most common accounting method used by businesses?
a. Debit
b. Accrual
c. Cash
d. Ledger - correct answer ✔✔b. Accrual
Before you can complete the adjusted trial balance, you first have to create the _____.
a. cash flow statement
b. balance sheet
c. trial balance
d. statement of retained earnings - correct answer ✔✔c. trial balance
Expenses incurred to generate revenue must be recorded in the same time period as the
revenue it generates. Which principle is this?
a. Revenue principle
b. Concept principle
c. Matching principle
d. Monetary unit principle - correct answer ✔✔c. Matching principle
What is the formula for calculating interest?
a. I = P x R x T
b. I = P / R x T
c. I = P x R - T
