Question 1

All of the following statements are correct except

Accepted Answer

A)  Good decision-making depends on good information. 
B)  A vital element in communicating economic events is the accountant's ability to analyze and interpret reported information. 
C)  The origins of accounting are generally attributed to Socrates, a classical Greek philosopher, who promoted accounting as a social contract. 
D)  The information that a user of financial information needs depends upon the kinds of decisions the user makes. 
A)  Good decision-making depends on good information. 
B)  A vital element in communicating economic events is the accountant's ability to analyze and interpret reported information. 
C)  The origins of accounting are generally attributed to Socrates, a classical Greek philosopher, who promoted accounting as a social contract. 
D)  The information that a user of financial information needs depends upon the kinds of decisions the user makes.

Question 2

Which of the following techniques are not used by accountants to interpret and report financial information?

Accepted Answer

A)  Graphs. 
B)  Special memos for each class of external users. 
C)  Charts. 
D)  Ratios. 
A)  Graphs. 
B)  Special memos for each class of external users. 
C)  Charts. 
D)  Ratios.

Question 3

In order to increase comparability, in recent years, the FASB and IASB have made efforts to reduce the differences between U.S.GAAP and IFRS through a process known as

Accepted Answer

A)  convergence 
B)  monetary unit assumption 
C)  the cost principle 
D)  the fair value principle 
A)  convergence 
B)  monetary unit assumption 
C)  the cost principle 
D)  the fair value principle

Question 4

The Constantine Company had the following assets and liabilities on the dates indicated.   Constantine began business on January 1, 2017, with an investment of $100,000.
Instructions
From an analysis of the change in stockholders' equity during the year, compute the net income (or loss) for:
(a) 2017, assuming Constantine's dividends were $45,000 for the year.
(b) 2018, assuming Constantine made an additional investment of $50,000 and paid no dividends in 2018.
(c) 2019, assuming Constantine made an additional investment of $15,000 and paid dividends of $40,000 in 2019.

Accepted Answer

The answer of The Constantine Company had the following assets...

Question 5

During the year 2018, Dilego Company earned revenues of $90,000, had expenses of $56,000, purchased assets with a cost of $10,000 and paid dividends of $6,000. Net income for the year is

Accepted Answer

A)  $18,000. 
B)  $24,000. 
C)  $28,000. 
D)  $34,000. 
A)  $18,000. 
B)  $24,000. 
C)  $28,000. 
D)  $34,000.

Question 6

Accounting communicates financial information about a business enterprise to both internal and external users.

Accepted Answer

A) True 
 B)False

Question 7

All of the financial statements are for a period of time except the

Accepted Answer

A)  income statement. 
B)  retained earnings statement. 
C)  balance sheet. 
D)  statement of cash flows. 
A)  income statement. 
B)  retained earnings statement. 
C)  balance sheet. 
D)  statement of cash flows.

Question 8

Stahl Consulting started the year with total assets of $60,000 and total liabilities of $15,000. During the year, the business recorded $48,000 in catering revenues and $30,000 in expenses. Stahl issued stock of $9,000 and paid dividends of $15,000 during the year. The stockholders' equity at the end of the year was

Accepted Answer

A)  $33,000. 
B)  $54,000. 
C)  $57,000. 
D)  $63,000. 
A)  $33,000. 
B)  $54,000. 
C)  $57,000. 
D)  $63,000.

Question 9

Bright Eyes Downtown Diner received a bill of $600 from the Jronand Wine Advertising Agency. The owner, A. A. Bondy, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is

Accepted Answer

A)  a decrease in Cash and an increase in Accounts Payable. 
B)  a decrease in Cash and an increase in Retained Earnings. 
C)  an increase in Accounts Payable and a decrease in Retained Earnings. 
D)  a decrease in Accounts Payable and an increase in Retained Earnings. 
A)  a decrease in Cash and an increase in Accounts Payable. 
B)  a decrease in Cash and an increase in Retained Earnings. 
C)  an increase in Accounts Payable and a decrease in Retained Earnings. 
D)  a decrease in Accounts Payable and an increase in Retained Earnings.

Question 10

Interpretation of reported information involves each of the following except

Accepted Answer

A)  limitations of reported data. 
B)  meaning of reported data. 
C)  uses of reported data. 
D)  All of these choices are correct. 
A)  limitations of reported data. 
B)  meaning of reported data. 
C)  uses of reported data. 
D)  All of these choices are correct.

Question 11

Wilco Legal Eagles Company entered into the following transactions during
March 2018.
1. Purchased office equipment for $23,000 from Business Equipment, Inc. on account.
2. Paid $3,000 cash for March rent on office furniture.
3. Received $15,000 cash from customers for legal work billed in February.
4. Provided legal services to Amy Construction Company for $3,500 cash.
5. Paid Northern States Power Co. $2,700 cash for electric usage in March.
6. Stockholders' invested an additional $32,000 in the business.
7. Paid Business Equipment, Inc. for the office equipment purchased in (1) above.
8. Incurred advertising expense for March of $1,900 on account.
Instructions
Indicate with the appropriate letter whether each of the transactions above results in:
(a) an increase in assets and a decrease in assets.
(b) an increase in assets and an increase in stockholders' equity.
(c) an increase in assets and an increase in liabilities.
(d) a decrease in assets and a decrease in stockholders' equity.
(e) a decrease in assets and a decrease in liabilities.
(f) an increase in liabilities and a decrease in stockholders' equity.
(g) an increase in stockholders' equity and a decrease in liabilities.

Accepted Answer

1. (c) 5. (d)
2. (d)

Question 12

An analysis of the transactions made by White Stripes & Co., a law firm, for the month of July is shown below. Each increase and decrease in stockholders' equity is explained.   Instructions
(a) Determine how much stockholders' equity increased for the month.
(b) Compute the amount of net income for the month.

Accepted Answer

The answer of An analysis of the transactions made by...

Question 13

Owners enjoy limited liability in a

Accepted Answer

A)  proprietorship. 
B)  partnership. 
C)  corporation. 
D)  sole proprietorship. 
A)  proprietorship. 
B)  partnership. 
C)  corporation. 
D)  sole proprietorship.

Question 14

The common characteristic possessed by all assets is

Accepted Answer

A)  long life. 
B)  great monetary value. 
C)  tangible nature. 
D)  future economic benefit. 
A)  long life. 
B)  great monetary value. 
C)  tangible nature. 
D)  future economic benefit.

Question 15

Which list below best describes the major services performed by public accountants?

Accepted Answer

A)  Bookkeeping, mergers, budgets. 
B)  Employee training, auditing, bookkeeping. 
C)  Auditing, taxation, management consulting. 
D)  Cost accounting, production scheduling, recruiting. 
A)  Bookkeeping, mergers, budgets. 
B)  Employee training, auditing, bookkeeping. 
C)  Auditing, taxation, management consulting. 
D)  Cost accounting, production scheduling, recruiting.

Question 16

Dividends ________________ stockholders' equity but are not expenses.

Accepted Answer

The answer of Dividends ________________ stockholders' equity but are not...

Question 17

The accounting process is correctly sequenced as

Accepted Answer

A)  identification, communication, recording. 
B)  recording, communication, identification. 
C)  identification, recording, communication. 
D)  communication, recording, identification. 
A)  identification, communication, recording. 
B)  recording, communication, identification. 
C)  identification, recording, communication. 
D)  communication, recording, identification.

Question 18

Management consulting includes examining the financial statements of companies and expressing an opinion as to the fairness of their presentation.

Accepted Answer

A) True 
 B)False

Question 19

A proprietorship is a business

Accepted Answer

A)  owned by one person. 
B)  owned by two or more persons. 
C)  organized as a separate legal entity under state corporation law. 
D)  owned by a governmental agency. 
A)  owned by one person. 
B)  owned by two or more persons. 
C)  organized as a separate legal entity under state corporation law. 
D)  owned by a governmental agency.

Question 20

John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a

Accepted Answer

A)  joint venture. 
B)  partnership. 
C)  corporation. 
D)  proprietorship. 
A)  joint venture. 
B)  partnership. 
C)  corporation. 
D)  proprietorship.

All of the following statements are correct except

Which of the following techniques are not used by accountants to interpret and report financial information?

In order to increase comparability, in recent years, the FASB and IASB have made efforts to reduce the differences between U.S.GAAP and IFRS through a process known as

During the year 2018, Dilego Company earned revenues of $90,000, had expenses of $56,000, purchased assets with a cost of $10,000 and paid dividends of $6,000. Net income for the year is

Accounting communicates financial information about a business enterprise to both internal and external users.

All of the financial statements are for a period of time except the

Bright Eyes Downtown Diner received a bill of $600 from the Jronand Wine Advertising Agency. The owner, A. A. Bondy, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is

Interpretation of reported information involves each of the following except

Owners enjoy limited liability in a

The common characteristic possessed by all assets is

Which list below best describes the major services performed by public accountants?

Dividends ________________ stockholders' equity but are not expenses.

The accounting process is correctly sequenced as

Management consulting includes examining the financial statements of companies and expressing an opinion as to the fairness of their presentation.

A proprietorship is a business

John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

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Exam 1: Accounting in Action

All of the following statements are correct except

Which of the following techniques are not used by accountants to interpret and report financial information?

In order to increase comparability, in recent years, the FASB and IASB have made efforts to reduce the differences between U.S.GAAP and IFRS through a process known as

During the year 2018, Dilego Company earned revenues of $90,000, had expenses of $56,000, purchased assets with a cost of $10,000 and paid dividends of $6,000. Net income for the year is

Accounting communicates financial information about a business enterprise to both internal and external users.

All of the financial statements are for a period of time except the

Bright Eyes Downtown Diner received a bill of $600 from the Jronand Wine Advertising Agency. The owner, A. A. Bondy, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is

Interpretation of reported information involves each of the following except

Owners enjoy limited liability in a

The common characteristic possessed by all assets is

Which list below best describes the major services performed by public accountants?

Dividends ________________ stockholders' equity but are not expenses.

The accounting process is correctly sequenced as

Management consulting includes examining the financial statements of companies and expressing an opinion as to the fairness of their presentation.

A proprietorship is a business

John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters