1. Why do we need a balance sheet?
to apply for a business loan
it is needed in our business plan
to show the net income each month
both answers 1 and 2
2. A balance sheet shows?
income for the fiscal period
shows what is owned, what is invested and what is owed
both answers 1 and two
revenue for the period
3. On a balance sheet, the first line contains?
the words balance sheet
the date
the company name
stockholders' equity
4. Bromley's Formal Wear carries an inventory of?
suits
shirts
wedding gowns
all of the above
5. The bank will not loan money to a company unless?
it is already in operation
they see that the owners have a vested interest
there no liabilities
they know that the company will only hire good employees
6. How much money seed money was invested in the business?
$5,000
$10,000
$125,000
$20,000
7. Items such as display cases, inventory, computers and filing cabinets are considered?
assets
liabilities
stockholders' equity
revenue
8. Where can you find prices of assets needed for your business?
catalogs
on-line
radio
all of the above
9. Display cases, clothing racks are assets. What account name should be used to classify them?
furniture and fixtures
accounts payable
stockholders' equity
all of the above
10. If our bank loan is for $150,000 and the term of the loan is for 10 years and the interest rate is 12%, what is the monthly cost?
$1,200
$1,400
$1,500
$2,000
11. The account name for the amount of money borrowed from the bank is classified as a ______ on the balance sheet?
liability
account payable
note payable
revenue
12. The The accounting equation states?
assets = liabilities - stockholders' equity
assets = liabilities + stockholders' equity
liabilities = revenue - expenses
none of the above
13. If assets = $235,800 and liabilities = $150,800, what is the value of common stock?
$85,000
$95,000
$100,000
$125,000
14. If liabilities equal $200,000 and common stock equals $300,00, what is the value of the assets?
$400,000
$500,000
$100,000
$175,000
15. If the total assets equal $100,000, what should the stockholders' equity plus liabilities be?
$100,000
$50,000
$95,000
none of the above
Chapter Accounting Test