978-0136115274 Chapter 1 Quiz Chapter 1

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CHAPTER 1 NAME ___________________________________

TEN-MINUTE QUIZ SECTION _____________ DATE____________

_____________________________________________________________________________

_____ 1. The primary purpose of a business is to:

a. Pay taxes to the IRS

b. Sell a product

c. Sell goods and/or services to make a profit for the owner(s)

d. Help others

_____ 2. Sources of capital include:

a. Owners (investors)

b. Creditors (lenders)

c. Both A and B

d. None of the above

_____ 3. All of the following are types of for-profit businesses, except:

a. Merchandising companies

b. Service companies

c. Financial service companies

d. Charitable organizations

_____ 4. What is the name of the group that has much of the responsibility for setting

financial standards?

a. Public Companies Accounting Oversight Board

b. Financial Accounting Standards Board

c. Securities and Exchange Commission

d. None of the above

_____ 5. A business may be organized as a:

a. Corporation

b. Sole proprietorship

c. Partnership

d. Any of the above

_____ 6. A repayment of the principal of loans to creditors would be shown on the

statement of cash flows as a(n):

a. Operating activity

b. Investing activity

c. Financing activity

d. Revenue activity

7. Every business transaction is made up of:

a. Resources

b. Agents

c. Events

d. All of the above

_____ 8. The balance sheet contains information about:

a. Revenues and expenses

b. Cash inflows and outflows

c. Assets, liabilities, and equity

d. All of the above

_____ 9. The income statement provides information about:

a. The financial position of the company at a point in time

b. The financial position of the company for a period of time

c. The amount of cash generated by operations

d. The performance of the company for a period of time

_____10. Which of the following financial statements reports the financial position of a

company?

a. The statement of cash flows

b. The statement of changes in owners’ equity

c. The balance sheet

d. The income statement

ANSWER KEY – CHAPTER 1 – TEN-MINUTE QUIZ