Question 1

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

Accepted Answer

A)  An increase of $80,000.
B)  A decrease of $80,000.
C)  An increase of $30,000.
D)  A decrease of $30,000.
E)  An increase of $25,000.F) B) and E)
G) B) and C)

Question 2

____________ are the increases in equity from a company's sales of products and services to customers.

Accepted Answer

The answer of ____________ are the increases in equity from...

Question 3

Accounts payable appear on which of the following statements?

Accepted Answer

A)  Balance sheet.
B)  Income statement.
C)  Statement of owner's equity.
D)  Statement of cash flows.
E)  Transaction statement.F) B) and C)
G) C) and D)

Question 4

The Superior Company acquired a building for $500,000.The building was appraised at a value of $575,000.The seller had paid $300,000 for the building 6 years ago.Which accounting principle would require Superior to record the building on its records at $500,000?

Accepted Answer

A)  Monetary unit assumption.
B)  Going-concern assumption.
C)  Cost principle.
D)  Business entity assumption.
E)  Revenue recognition principle.F) D) and E)
G) All of the above

Question 5

A company acquires equipment for $75,000 cash.This represents a(n) :

Accepted Answer

A)  Operating activity.
B)  Investing activity.
C)  Financing activity.
D)  Revenue activity.
E)  Expense activity.F) B) and D)
G) C) and D)

Question 6

The income statement describes revenues earned and expenses incurred over a specified period of time due to earnings activities.

Accepted Answer

A) True 
 B)False

Question 7

In a business decision where there are ethical concerns,the preferred course of action should be one that:

Accepted Answer

A)  Is agreed upon by the most managers.
B)  Maximizes the company's profits.
C)  Results in maintaining operations at the current level.
D)  Costs the least to implement.
E)  Avoids casting doubt on the decision maker and upholds trust.F) A) and C)
G) B) and C)

Question 8

Owner financing refers to resources contributed by creditors or lenders.

Accepted Answer

A) True 
 B)False

Question 9

The area of accounting aimed at serving the decision making needs of internal users is:

Accepted Answer

A)  Financial accounting.
B)  Managerial accounting.
C)  External auditing.
D)  SEC reporting.
E)  Bookkeeping.F) A) and B)
G) C) and D)

Question 10

The assumption that requires that a business be accounted for separately from its owners is the __________________ assumption.

Accepted Answer

The answer of The assumption that requires that a business...

Question 11

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Accepted Answer

A) True 
 B)False

Question 12

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:

Accepted Answer

A)  Going-concern assumption.
B)  Business entity assumption.
C)  Objectivity principle.
D)  Cost Principle.
E)  Monetary unit assumption.F) C) and E)
G) A) and B)

Question 13

__________________ is an information and measurement system that identifies,records and communicates relevant,reliable and comparable information about an organization's economic activities.

Accepted Answer

The answer of __________________ is an information and measurement system...

Question 14

Identifying the proper ethical path is usually easy.

Accepted Answer

A) True 
 B)False

Question 15

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Accepted Answer

A) True 
 B)False

Question 16

Use the following information as of December 31 to determine equity.

Accepted Answer

A)  $57,000.
B)  $141,000.
C)  $297,000.
D)  $438,000.
E)  $579,000.F) C) and E)
G) B) and C)

Question 17

Assets are the resources a company owns or controls that are expected to yield future benefits.

Accepted Answer

A) True 
 B)False

Question 18

If Houston Company billed a client for $10,000 of consulting work completed,the accounts receivable asset increases by $10,000 and:

Accepted Answer

A)  Accounts payable decreases $10,000.
B)  Accounts payable increases $10,000.
C)  Cash increases $10,000.
D)  Revenue increases $10,000.
E)  Revenue decreases $10,000F) A) and C)
G) A) and D)

Question 19

The independent group that is attempting to harmonize accounting practices of different countries is the:

Accepted Answer

A)  AICPA.
B)  IASB.
C)  CAP.
D)  SEC.
E)  FASB.F) B) and C)
G) B) and D)

Question 20

A financial statement providing information that helps users understand a company's financial status,and which lists the types and amounts of assets,liabilities,and equity as of a specific date,is called a(n) :

Accepted Answer

A)  Balance sheet.
B)  Income statement.
C)  Statement of cash flows.
D)  Statement of owner's equity.
E)  Financial Status Statement.F) C) and D)
G) A) and B)

Exam 1: Accounting in Business

The assumption that requires that a business be accounted for separately from its owners is the __________________ assumption.

Correct AnswerverifiedShow Answer

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:

Correct AnswerverifiedShow Answer

A financial statement providing information that helps users understand a company's financial status,and which lists the types and amounts of assets,liabilities,and equity as of a specific date,is called a(n) :

Correct AnswerverifiedShow Answer

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Correct AnswerverifiedShow Answer

____________ are the increases in equity from a company's sales of products and services to customers.

Correct AnswerverifiedShow Answer

The independent group that is attempting to harmonize accounting practices of different countries is the:

Correct AnswerverifiedShow Answer

The income statement describes revenues earned and expenses incurred over a specified period of time due to earnings activities.

Correct AnswerverifiedShow Answer

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Correct AnswerverifiedShow Answer

Assets are the resources a company owns or controls that are expected to yield future benefits.

Correct AnswerverifiedShow Answer

If Houston Company billed a client for $10,000 of consulting work completed,the accounts receivable asset increases by $10,000 and:

Correct AnswerverifiedShow Answer

__________________ is an information and measurement system that identifies,records and communicates relevant,reliable and comparable information about an organization's economic activities.

Correct AnswerverifiedShow Answer

A company acquires equipment for $75,000 cash.This represents a(n) :

Correct AnswerverifiedShow Answer

Use the following information as of December 31 to determine equity.

Correct AnswerverifiedShow Answer

Identifying the proper ethical path is usually easy.

Correct AnswerverifiedShow Answer

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

Correct AnswerverifiedShow Answer

The area of accounting aimed at serving the decision making needs of internal users is:

Correct AnswerverifiedShow Answer

Owner financing refers to resources contributed by creditors or lenders.

Correct AnswerverifiedShow Answer

Accounts payable appear on which of the following statements?

Correct AnswerverifiedShow Answer

The Superior Company acquired a building for $500,000.The building was appraised at a value of $575,000.The seller had paid $300,000 for the building 6 years ago.Which accounting principle would require Superior to record the building on its records at $500,000?

Correct AnswerverifiedShow Answer

In a business decision where there are ethical concerns,the preferred course of action should be one that:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified