Question 1

A company's current ratio is 1.5, what is the effect of obtaining land by issuing shares of stock?

Accepted Answer

A) increase 
B) decrease 
C) no change 
D) Unable to determine with this limited information. 
A) increase 
B) decrease 
C) no change 
D) Unable to determine with this limited information.

Question 2

Under the double-entry system of accounting, a debit is always a negative entry.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following best describes one effect of recognizing expenses incurred by a business entity?

Accepted Answer

A) Assets will increase. 
B) Liabilities will decrease. 
C) Contributed capital will increase. 
D) Retained earnings will decrease. 
A) Assets will increase. 
B) Liabilities will decrease. 
C) Contributed capital will increase. 
D) Retained earnings will decrease.

Question 4

____________________ is the capacity of information to make a difference in a decision by helping make timely predictions or provide timely feedback.

Accepted Answer

The answer of ____________________ is the capacity of information to...

Question 5

Under the double-entry system of accounting, every transaction is entered in at least two accounts on opposite sides of a T-account.

Accepted Answer

A) True 
 B)False

Question 6

Because it tends to provide the most reliable measure of activity, all assets are reported on the balance sheet at their fair market values.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements best describes the effects of recognizing revenue earned by a business entity?

Accepted Answer

A) Assets increase only when cash sales are collected. 
B) Stockholders' equity increases only when credit sales are made. 
C) Assets and stockholders' equity increase when either cash or credit sales are made. 
D) Assets increase and stockholders' equity decreases when either cash or credit sales are made. 
A) Assets increase only when cash sales are collected. 
B) Stockholders' equity increases only when credit sales are made. 
C) Assets and stockholders' equity increase when either cash or credit sales are made. 
D) Assets increase and stockholders' equity decreases when either cash or credit sales are made.

Question 8

A full disclosure policy stipulates that all information that would make a difference to financial statement users should be revealed.

Accepted Answer

A) True 
 B)False

Question 9

The time-period assumption assumes that a company prepares its financial statements every month.

Accepted Answer

A) True 
 B)False

Question 10

____________________ is the quality of accounting information that allows a user to compare two or more accounting periods for a single company.

Accepted Answer

The answer of ____________________ is the quality of accounting information...

Question 11

When a firm borrows money, one effect on the accounting equation is a(n)

Accepted Answer

A) decrease in contributed capital. 
B) increase in assets. 
C) decrease in liabilities. 
D) decrease in assets. 
A) decrease in contributed capital. 
B) increase in assets. 
C) decrease in liabilities. 
D) decrease in assets.

Question 12

The term used to refer to an asset's original cost is book value.

Accepted Answer

A) True 
 B)False

Question 13

HVAC Service
The following transactions occurred during  
-Refer to HVAC Service. The journal entry to record payment of the salaries will include a credit to

Accepted Answer

A) salary expense. 
B) salary payable. 
C) prepaid salaries. 
D) cash. 
A) salary expense. 
B) salary payable. 
C) prepaid salaries. 
D) cash.

Question 14

____________________ is the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences.

Accepted Answer

The answer of ____________________ is the quality of accounting information...

Question 15

A company in the process of liquidation is considered to be under the going concern assumption.

Accepted Answer

A) True 
 B)False

Question 16

Happy Heights Country Club
Selected accounts at July 31 are provided below:
  
-Refer to Happy Heights Country Club. On which date did the country club sell a club membership on account?

Accepted Answer

A) July 2nd 
B) July 3rd 
C) July 5th 
D) July 7th 
A) July 2nd 
B) July 3rd 
C) July 5th 
D) July 7th

Question 17

HVAC Service
The following transactions occurred during  
-Refer to HVAC Service. The journal entry to record the bills sent to clients will include a debit of $12,000 to

Accepted Answer

A) service revenue. 
B) cash. 
C) accounts receivable. 
D) retained earnings. 
A) service revenue. 
B) cash. 
C) accounts receivable. 
D) retained earnings.

Question 18

The concept that assumes that an entity is not in the process of bankruptcy is called the ___________ concept.

Accepted Answer

The answer of The concept that assumes that an entity...

Question 19

The going concern assumption is concerned with

Accepted Answer

A) the company's ability to continue operations long enough to carry out its existing obligations. 
B) any information that is capable of influencing the decisions of anyone using the financial statements. 
C) measuring ongoing business activities at their exchange price at the time of the initial external transaction. 
D) offsetting management's natural optimism by providing a prudent approach to uncertainty in financial statement items. 
A) the company's ability to continue operations long enough to carry out its existing obligations. 
B) any information that is capable of influencing the decisions of anyone using the financial statements. 
C) measuring ongoing business activities at their exchange price at the time of the initial external transaction. 
D) offsetting management's natural optimism by providing a prudent approach to uncertainty in financial statement items.

Question 20

An accountant is uncertain about the best estimate of an amount for a business transaction. If there are two possible amounts that could be recorded, the amount least likely to overstate assets and earnings is selected. Which of the following qualities is characterized by this action?

Accepted Answer

A) comparability. 
B) conservatism. 
C) materiality. 
D) neutrality. 
A) comparability. 
B) conservatism. 
C) materiality. 
D) neutrality.

A company's current ratio is 1.5, what is the effect of obtaining land by issuing shares of stock?

Under the double-entry system of accounting, a debit is always a negative entry.

Which of the following best describes one effect of recognizing expenses incurred by a business entity?

____________________ is the capacity of information to make a difference in a decision by helping make timely predictions or provide timely feedback.

Under the double-entry system of accounting, every transaction is entered in at least two accounts on opposite sides of a T-account.

Because it tends to provide the most reliable measure of activity, all assets are reported on the balance sheet at their fair market values.

Which of the following statements best describes the effects of recognizing revenue earned by a business entity?

A full disclosure policy stipulates that all information that would make a difference to financial statement users should be revealed.

The time-period assumption assumes that a company prepares its financial statements every month.

____________________ is the quality of accounting information that allows a user to compare two or more accounting periods for a single company.

When a firm borrows money, one effect on the accounting equation is a(n)

The term used to refer to an asset's original cost is book value.

HVAC Service The following transactions occurred during -Refer to HVAC Service. The journal entry to record payment of the salaries will include a credit to

____________________ is the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences.

A company in the process of liquidation is considered to be under the going concern assumption.

Happy Heights Country Club Selected accounts at July 31 are provided below: -Refer to Happy Heights Country Club. On which date did the country club sell a club membership on account?

HVAC Service The following transactions occurred during -Refer to HVAC Service. The journal entry to record the bills sent to clients will include a debit of $12,000 to

The concept that assumes that an entity is not in the process of bankruptcy is called the ___________ concept.

The going concern assumption is concerned with

An accountant is uncertain about the best estimate of an amount for a business transaction. If there are two possible amounts that could be recorded, the amount least likely to overstate assets and earnings is selected. Which of the following qualities is characterized by this action?

Accounting and The Financial Statements

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Finance and Stock Market Equilibrium

Filters

Exam 2: The Accounting Information System

A company's current ratio is 1.5, what is the effect of obtaining land by issuing shares of stock?

Under the double-entry system of accounting, a debit is always a negative entry.

Which of the following best describes one effect of recognizing expenses incurred by a business entity?

____________________ is the capacity of information to make a difference in a decision by helping make timely predictions or provide timely feedback.

Under the double-entry system of accounting, every transaction is entered in at least two accounts on opposite sides of a T-account.

Because it tends to provide the most reliable measure of activity, all assets are reported on the balance sheet at their fair market values.

Which of the following statements best describes the effects of recognizing revenue earned by a business entity?

A full disclosure policy stipulates that all information that would make a difference to financial statement users should be revealed.

The time-period assumption assumes that a company prepares its financial statements every month.

____________________ is the quality of accounting information that allows a user to compare two or more accounting periods for a single company.

When a firm borrows money, one effect on the accounting equation is a(n)

The term used to refer to an asset's original cost is book value.

HVAC Service The following transactions occurred during -Refer to HVAC Service. The journal entry to record payment of the salaries will include a credit to

____________________ is the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences.

A company in the process of liquidation is considered to be under the going concern assumption.

Happy Heights Country Club Selected accounts at July 31 are provided below: -Refer to Happy Heights Country Club. On which date did the country club sell a club membership on account?

HVAC Service The following transactions occurred during -Refer to HVAC Service. The journal entry to record the bills sent to clients will include a debit of $12,000 to

The concept that assumes that an entity is not in the process of bankruptcy is called the ___________ concept.

The going concern assumption is concerned with

An accountant is uncertain about the best estimate of an amount for a business transaction. If there are two possible amounts that could be recorded, the amount least likely to overstate assets and earnings is selected. Which of the following qualities is characterized by this action?

Accounting and The Financial Statements

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Finance and Stock Market Equilibrium

Filters