Financial Accounting Chapter 1 Exam
2026 Questions and Answers Graded A+
On Feb. 4, a company received a $2,000 payment from a previously billed
customer. Which of the following statements is true?
A. The Cash account would increase; Service Revenue would also increase.
B. Accounts Receivable would increase; the Cash account would decrease.
C. The Cash account would increase; Accounts Receivable would decrease.
D. Accounts Receivable would increase; Service Revenue would also increase. -
Correct answer-C. The Cash account would increase; Accounts Receivable would
decrease.
Morreale Company buys a $12,000 van on credit. This transaction will result in an
A. increase in assets and increase in liabilities
B. increase in assets and increase in stockholders' equity
, C. increase in assets and decrease in liabilities
D. no change in total assets - Correct answer-A. increase in assets and increase in
liabilities
A net loss will result during a time period when:
A. assets exceed liabilities
B. assets exceed stockholders' equity
C. expenses exceed revenues
D. revenues exceed expenses - Correct answer-C. expenses exceed revenues
Which of the following accounts would not appear on the Income Statement?
A. Accounts Payable
B. Rent Expense
C. Service Revenue
D. Sales - Correct answer-A. Accounts Payable
Which of the following accounts is not a liability?
2026 Questions and Answers Graded A+
On Feb. 4, a company received a $2,000 payment from a previously billed
customer. Which of the following statements is true?
A. The Cash account would increase; Service Revenue would also increase.
B. Accounts Receivable would increase; the Cash account would decrease.
C. The Cash account would increase; Accounts Receivable would decrease.
D. Accounts Receivable would increase; Service Revenue would also increase. -
Correct answer-C. The Cash account would increase; Accounts Receivable would
decrease.
Morreale Company buys a $12,000 van on credit. This transaction will result in an
A. increase in assets and increase in liabilities
B. increase in assets and increase in stockholders' equity
, C. increase in assets and decrease in liabilities
D. no change in total assets - Correct answer-A. increase in assets and increase in
liabilities
A net loss will result during a time period when:
A. assets exceed liabilities
B. assets exceed stockholders' equity
C. expenses exceed revenues
D. revenues exceed expenses - Correct answer-C. expenses exceed revenues
Which of the following accounts would not appear on the Income Statement?
A. Accounts Payable
B. Rent Expense
C. Service Revenue
D. Sales - Correct answer-A. Accounts Payable
Which of the following accounts is not a liability?
