Question 1

The amount of stockholders' equity in a business is not affected by

Accepted Answer

A) The percentage of total assets held in cash. 
B) Assets consumed in the process of earning revenues. 
C) The profitability of the business. 
D) The amount of dividends declared and paid to stockholders. 
A) The percentage of total assets held in cash. 
B) Assets consumed in the process of earning revenues. 
C) The profitability of the business. 
D) The amount of dividends declared and paid to stockholders.

Question 2

Mofro's Computer Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000. During the year, the business recorded $500,000 in computer repair revenues, $300,000 in expenses, and Mofro paid dividends of $50,000. Mofro's stockholders' equity changed by what amount from the beginning of the year to the end of the year?

Accepted Answer

A) $100,000. 
B) $150,000. 
C) $200,000. 
D) $250,000. 
A) $100,000. 
B) $150,000. 
C) $200,000. 
D) $250,000.

Question 3

Which of the following is not a reason one set of international accounting standards are needed?

Accepted Answer

A) multinational corporations. 
B) financial markets. 
C) information technology. 
D) all of the above are reasons one set of international accounting standards are needed. 
A) multinational corporations. 
B) financial markets. 
C) information technology. 
D) all of the above are reasons one set of international accounting standards are needed.

Question 4

Auditing is

Accepted Answer

A) the examination of financial statements by a CPA in order to express an opinion on their fairness. 
B) a part of accounting that involves only recording of economic events. 
C) an area of accounting that involves such activities as cost accounting, budgeting, and accounting information systems. 
D) conducted by the Securities and Exchange Commission to ensure that registered financial statements are presented fairly. 
A) the examination of financial statements by a CPA in order to express an opinion on their fairness. 
B) a part of accounting that involves only recording of economic events. 
C) an area of accounting that involves such activities as cost accounting, budgeting, and accounting information systems. 
D) conducted by the Securities and Exchange Commission to ensure that registered financial statements are presented fairly.

Question 5

The cost of an asset and its fair value are

Accepted Answer

A) never the same. 
B) the same when the asset is sold. 
C) irrelevant when the asset is used by the business in its operations. 
D) the same on the date of acquisition. 
A) never the same. 
B) the same when the asset is sold. 
C) irrelevant when the asset is used by the business in its operations. 
D) the same on the date of acquisition.

Question 6

If expenses are paid in cash, then

Accepted Answer

A) assets will increase. 
B) liabilities will decrease. 
C) stockholders' equity will increase. 
D) assets will decrease. 
A) assets will increase. 
B) liabilities will decrease. 
C) stockholders' equity will increase. 
D) assets will decrease.

Question 7

The Securities and Exchange Commission oversees U.S. financial markets and accounting standard-setting bodies.

Accepted Answer

A) True 
 B)False

Question 8

The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments of a company during a period.

Accepted Answer

A) True 
 B)False

Question 9

In the retained earnings statement, revenues are listed first, followed by expenses, and net income (or net loss).

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a reason one set of international accounting standards are needed?

Accepted Answer

A) multinational corporations. 
B) mergers and acquisitions. 
C) information technology. 
D) all of these answer choices are correct. 
A) multinational corporations. 
B) mergers and acquisitions. 
C) information technology. 
D) all of these answer choices are correct.

Question 11

Stockholders' equity can be described as

Accepted Answer

A) creditorship claim on total assets. 
B) ownership claim on total assets. 
C) benefactor's claim on total assets. 
D) debtor claim on total assets. 
A) creditorship claim on total assets. 
B) ownership claim on total assets. 
C) benefactor's claim on total assets. 
D) debtor claim on total assets.

Question 12

Liabilities of a company are owed to

Accepted Answer

A) debtors. 
B) benefactors. 
C) creditors. 
D) underwriters. 
A) debtors. 
B) benefactors. 
C) creditors. 
D) underwriters.

Question 13

At October 1, Arcade Fire Enterprises reported stockholders' equity of $70,000. During October, common stock of $10,000 was issued and the company posted a net loss of $4,000. If stockholders' equity at October 31 totals $70,000, what amount of dividends were paid during the month?

Accepted Answer

A) $0 
B) $4,000 
C) $6,000 
D) $10,000 
A) $0 
B) $4,000 
C) $6,000 
D) $10,000

Question 14

The historical cost principle requires that when assets are acquired, they be recorded at

Accepted Answer

A) appraisal value. 
B) cost. 
C) market price. 
D) book value. 
A) appraisal value. 
B) cost. 
C) market price. 
D) book value.

Question 15

Stockholders' equity is decreased by

Accepted Answer

A) assets. 
B) revenues. 
C) expenses. 
D) liabilities. 
A) assets. 
B) revenues. 
C) expenses. 
D) liabilities.

Question 16

The financial statement that summarizes the financial position of a company is the

Accepted Answer

A) income statement. 
B) balance sheet. 
C) operating statement. 
D) retained earnings statement. 
A) income statement. 
B) balance sheet. 
C) operating statement. 
D) retained earnings statement.

Question 17

The conceptual framework that underlies IFRS

Accepted Answer

A) is very similar to that used to develop GAAP. 
B) does not define assets or liabilities. 
C) does not define equity. 
D) does not define income or expenses. 
A) is very similar to that used to develop GAAP. 
B) does not define assets or liabilities. 
C) does not define equity. 
D) does not define income or expenses.

Question 18

Matador Company purchases $1,300 of equipment from Danger Mouse Inc. for cash. The effect on the components of the basic accounting equation of Matador Company is

Accepted Answer

A) an increase in assets and liabilities. 
B) a decrease in assets and liabilities. 
C) no change in total assets. 
D) an increase in assets and a decrease in liabilities. 
A) an increase in assets and liabilities. 
B) a decrease in assets and liabilities. 
C) no change in total assets. 
D) an increase in assets and a decrease in liabilities.

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

GAAP, compared to IFRS, tends to be more

Accepted Answer

A) simple in accounting requirements. 
B) rules-based. 
C) principles-based. 
D) simple in disclosure requirements. 
A) simple in accounting requirements. 
B) rules-based. 
C) principles-based. 
D) simple in disclosure requirements.

The amount of stockholders' equity in a business is not affected by

Which of the following is not a reason one set of international accounting standards are needed?

Auditing is

The cost of an asset and its fair value are

If expenses are paid in cash, then

The Securities and Exchange Commission oversees U.S. financial markets and accounting standard-setting bodies.

The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments of a company during a period.

In the retained earnings statement, revenues are listed first, followed by expenses, and net income (or net loss).

Which of the following is not a reason one set of international accounting standards are needed?

Stockholders' equity can be described as

Liabilities of a company are owed to

At October 1, Arcade Fire Enterprises reported stockholders' equity of $70,000. During October, common stock of $10,000 was issued and the company posted a net loss of $4,000. If stockholders' equity at October 31 totals $70,000, what amount of dividends were paid during the month?

The historical cost principle requires that when assets are acquired, they be recorded at

Stockholders' equity is decreased by

The financial statement that summarizes the financial position of a company is the

The conceptual framework that underlies IFRS

Matador Company purchases $1,300 of equipment from Danger Mouse Inc. for cash. The effect on the components of the basic accounting equation of Matador Company is

A proprietorship is a business

GAAP, compared to IFRS, tends to be more

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 1: Accounting in Action

The amount of stockholders' equity in a business is not affected by

Which of the following is not a reason one set of international accounting standards are needed?

Auditing is

The cost of an asset and its fair value are

If expenses are paid in cash, then

The Securities and Exchange Commission oversees U.S. financial markets and accounting standard-setting bodies.

The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments of a company during a period.

In the retained earnings statement, revenues are listed first, followed by expenses, and net income (or net loss).

Which of the following is not a reason one set of international accounting standards are needed?

Stockholders' equity can be described as

Liabilities of a company are owed to

At October 1, Arcade Fire Enterprises reported stockholders' equity of $70,000. During October, common stock of $10,000 was issued and the company posted a net loss of $4,000. If stockholders' equity at October 31 totals $70,000, what amount of dividends were paid during the month?

The historical cost principle requires that when assets are acquired, they be recorded at

Stockholders' equity is decreased by

The financial statement that summarizes the financial position of a company is the

The conceptual framework that underlies IFRS

Matador Company purchases $1,300 of equipment from Danger Mouse Inc. for cash. The effect on the components of the basic accounting equation of Matador Company is

A proprietorship is a business

GAAP, compared to IFRS, tends to be more

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters