1) An example of an economic entity is a:

1)  An example of an economic entity is a: 

a) Town

b) Business

c) Nonprofit hospital

d) Church

2) A firm issues periodic reports called: 

a) financial statements

b) summaries

c) tax returns

d) audits

3) If the income statement covered a six-month period ending on November 30, 2010, the third line of the income statement heading would read: 

a) Month Ended November 30, 2010.

b) November 30, 2010.

c) Six-month Period Ended November 30, 2010.

d) Month of November, 2010.

4) The financial statement that is prepared first is: 

a) up to the accountant.

b) the income statement.

c) the balance sheet.

d) the statement of owner's equity

5) A firm paid cash to apply against a debt. To record this transaction, the accountant would: 

a) debit Accounts Receivable and credit Cash

b) debit Accounts Payable and credit Cash

c) debit Cash and credit Accounts Payable

d) credit Cash and credit Accounts Payable

6) The normal balance of an account is the __________ side of the account. 

a) Increase

b) Decrease

c) Left   

d) right

7) The journal entry to record the payment of a monthly utility bill would include a debit to __________ and a credit to __________. 

a) Utilities Expense; Capital

b) Capital; Cash

c) Utilities Expense; Cash

d) Utilities Expense; Accounts Payable

8) When a trial balance is in balance: 

a) adjusting entries are not required

b) the general ledger is free of errors

c) the debit account balances equal the credit account balances

d) the company has earned a net income

9) Which of the following accounts is NOT closed? 

a) Cash

b) Fees Income

c) Rent Expense

d) Joan Wilson, Drawing

10) After the closing entries are posted to the ledger, each revenue account will have: 

a) a zero balance

b) a debit balance

c) a credit balance

d) either a debit or a credit balance