Question

50 

The assets section of the balance sheet normally presents assets in 

the order of smallest to largest dollar amounts 

the order in which they will be converted into cash or used in operations 

the order of largest to smallest dollar amounts 

alphabetical order 

49 

Which of the following best describes accounting? 

It is used only for filling out tax returns. 

It only provides information used internally by managers. 

It records economic data but does not communicate the data to users according to any specific rules. 

It is an information system that provides reports to internal and external users regarding the economic activities and condition of a business.

48 

Earning revenue 

decreases assets, increases liabilities 

increases assets, increases stockholders' equity 

increases one asset, decreases another asset 

increases assets, decreases stockholders' equity

45 

The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing entities 

True 

False

47 

Which of the following types of accounts have a normal debit balance? 

assets, expenses 

assets, liabilities 

revenues, liabilities 

liabilities, expenses

Answer 1

50.

Correct answer is option b = the order in which they will be converted into cash or used in operations.

Explanation :

As a general rule , assets are presented in balance sheet in order of their liquidity . Which means, in order of time they would generally take to convert into cash.

Cash is always presented first, then marketable securities, account receivables and inventories . And after that , fixed assets and long term assets.

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49.

Correct answer is option d = it is an information system that provides reports to internal and external users regarding the economic activities and conditions of the business.

Explanation :

Option a is wrong, as accounting is not just for tax purposes. It has various other uses also.

Option b is also wrong , as accounting is not just used by internal management. Its users are also external .

Option c is incorrect , as it records data and also communicates and reports it to users.

Option d is correct.

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48.

Correct answer is option b = increases assets , increases shareholder's equity.

Explanation :

Earning revenue increases cash or account receivable on asset side.

And also it increases net income, which adds in retained earning , and increases the shareholder's equity .

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45.

Th given statement is " false "

Explanation :

The primary role of accounting is not the determination of tax.

The primary role of accounting is to determine the financial performance of business for a financial year, and to determine the financial position of business at the end of financial year.

The main purpose is to provide useful financial information to various users and stakeholders of business.

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47.

Correct answer is option a = assets , expenses.

Explanation :

Assets and expenses have normal debit balance.

Revenues and liabilities have normal credit balance.

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