Midterm Sample Review Questions

What are current assets?

• Assets expected to be used within more than a year

• Assets that will be converted into cash, sold, or consumed within one year

• Assets shared by business partners

• Long-term investments

Which of the following is NOT an asset?

• Cash

• Accounts Receivable

• Equipment

• Notes Payable

What is a non-current asset?

• A debt to be settled in the current period

• An intangible or tangible resource used over a long period

• Any item listed under equity

• Resources sold within the same fiscal period

What are accounts payable?

• The company's total equity

• Debts the company owes to suppliers for goods or services received

• A type of revenue

• A company's share capital

What is retained earnings?

• Assets held by the company

• Income earned and not distributed as dividends

• Owner contributions to the business

• Expenses incurred by the company

What is revenue?

• The total expenses incurred by a company

• The income earned by a business from its operations

• An investment made by the owner

• Resources borrowed by the company

What is depreciation?

• The increase in the value of an asset

• An expense that reduces the carrying value of an asset over time

• A reduction in the company's equity

• The elimination of liabilities

What are intangible assets?

• Assets that cannot be touched but provide value, like patents or trademarks

• Resources expected to be consumed within a year

• Items used to repay a company's debt

• Contributions made by shareholders

What is the accounting equation?

• Assets + Equity = Liabilities

• Assets = Liabilities - Equity

• Assets = Liabilities + Equity

• Equity = Assets + Liabilities

What is the definition of goodwill?

• A tangible long-term asset owned by the company

• The excess of the purchase price over the fair value of acquired net assets

• Revenue earned but not yet paid

• Equity contributions from owners