Chapter 1 Question Review 1
Chapter 1 Questions
Multiple Choice
1. A business organized as a separate legal entity is a
a. corporation.
b. proprietor.
c. government unit.
d. partnership.
2. Which of the following is not one of the three forms of business organization?
a. Corporations
b. Partnerships
c. Proprietorships
d. Investors
3. Which of the following would not be considered an internal user of accounting data for the Xanadu
Company?
a. President of the company
b. Production manager
c. Merchandise inventory clerk
d. President of the employees' labor union
4. The liability created by a business when it purchases coffee beans and coffee cups on credit from
suppliers is termed a(n)
a. account payable.
b. account receivable.
c. revenue.
d. expense.
5. The right to receive money in the future is called a(n)
a. account payable.
b. account receivable.
c. liability.
d. revenue.
6. The cost of assets consumed or services used is also known as
a. a revenue.
b. an expense.
c. a liability.
d. an asset.
7. The best definition of assets is the
a. cash owned by the company.
b. collections of resources belonging to the company and the claims on these resources.
c. owners’ investment in the business.
d. resources belonging to a company that have future benefit to the company.
