1. Debt created by business when it makes purchase on account is referred to as:

a. accounts payable
b. accounts receivable
c. asset
d. expense payable

2. Retained Earnings represents:

a. amount invested in entity by owners.
b. cash that is available for dividends
c. cumulative net income that has not been distributed to owners as dividends.
d. par value of common stock outstanding

3. Balance sheet contains the following accounts except:

a. Goodwill
b. Accounts Payable
c. Cash
d. Cost of Goods Sold

4. Return on investment measure of performance:

a. Is not as important a measure of management effectiveness as amount of net income?
b. Relates dividends paid to the entity's assets.
c. Is find outd using net income as the amount of return?
d. Is find outd by dividing average assets for a period by the amount of net income for the period

5. Which of the given accounts are used in calculation of working capital?

a. Retained Earnings
b. Sales
c. Merchandise Inventory
d. Common Stock