Question 1

The primary accounting standard-setting body in the United States is the

Accepted Answer

A) Financial Accounting Standards Board. 
B) International Accounting Standards Board. 
C) Internal Revenue Service. 
D) Securities and Exchange Commission. 
A) Financial Accounting Standards Board. 
B) International Accounting Standards Board. 
C) Internal Revenue Service. 
D) Securities and Exchange Commission.

Question 2

The purchase of office equipment on credit increases total assets and total liabilities.

Accepted Answer

A) True 
 B)False

Question 3

If a corporation distributes cash to its stockholders, then

Accepted Answer

A) there has been a violation of accounting principles. 
B) stockholders' equity will increase. 
C) stockholders' equity will decrease. 
D) there will be a new liability showing the stockholders owes money to the business. 
A) there has been a violation of accounting principles. 
B) stockholders' equity will increase. 
C) stockholders' equity will decrease. 
D) there will be a new liability showing the stockholders owes money to the business.

Question 4

Net income results when

Accepted Answer

A) Assets > Liabilities. B) Revenues = Expenses. C) Revenues > Expenses. D) Revenues < Expenses. A) Assets > Liabilities. B) Revenues = Expenses. C) Revenues > Expenses. D) Revenues < Expenses.

Question 5

Accounting information is used only by external users with a financial interest in a business enterprise.

Accepted Answer

A) True 
 B)False

Question 6

Sources of increases to stockholder's equity are

Accepted Answer

A) additional investments by owners. 
B) purchases of merchandise. 
C) dividends. 
D) expenses. 
A) additional investments by owners. 
B) purchases of merchandise. 
C) dividends. 
D) expenses.

Question 7

Identifying is the process of keeping a chronological diary of events measured in dollars and cents.

Accepted Answer

A) True 
 B)False

Question 8

Liabilities

Accepted Answer

A) are future economic benefits. 
B) are existing debts and obligations. 
C) possess service potential. 
D) are things of value used by the business in its operation. 
A) are future economic benefits. 
B) are existing debts and obligations. 
C) possess service potential. 
D) are things of value used by the business in its operation.

Question 9

A small neighborhood barber shop that is operated by its owner would likely be organized as a

Accepted Answer

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

Question 10

U.S. standards are referred to as

Accepted Answer

A) IFRS. 
B) GAAP. 
C) IASB. 
D) FASB. 
A) IFRS. 
B) GAAP. 
C) IASB. 
D) FASB.

Question 11

Owners' claims to total business assets take precedence over the claims of creditors because owners invest assets in the business and are liable for losses.

Accepted Answer

A) True 
 B)False

Question 12

The ending retained earnings amount is shown on

Accepted Answer

A) the balance sheet only. 
B) the retained earnings statement only. 
C) both the income statement and the retained earnings statement. 
D) both the balance sheet and the retained earnings statement. 
A) the balance sheet only. 
B) the retained earnings statement only. 
C) both the income statement and the retained earnings statement. 
D) both the balance sheet and the retained earnings statement.

Question 13

If supplies that have been purchased are used in the course of business, then

Accepted Answer

A) a liability will increase. 
B) an asset will increase. 
C) stockholders' equity will decrease. 
D) stockholders' equity will increase. 
A) a liability will increase. 
B) an asset will increase. 
C) stockholders' equity will decrease. 
D) stockholders' equity will increase.

Question 14

If total liabilities increased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

Accepted Answer

A) $50,000 decrease 
B) $10,000 decrease 
C) $10,000 increase 
D) $50,000 increase 
A) $50,000 decrease 
B) $10,000 decrease 
C) $10,000 increase 
D) $50,000 increase

Question 15

Financial accounting ethics violations are

Accepted Answer

A) not a problem in the U.S.or internationally. 
B) much more common in the U.S.than internationally. 
C) much more common internationally than in the U.S. 
D) a major problem both in the U.S.and internationally. 
A) not a problem in the U.S.or internationally. 
B) much more common in the U.S.than internationally. 
C) much more common internationally than in the U.S. 
D) a major problem both in the U.S.and internationally.

Question 16

When assets are distributed to the owners of a corporation, these distributions are termed

Accepted Answer

A) depletions. 
B) consumptions. 
C) dividends. 
D) a credit line. 
A) depletions. 
B) consumptions. 
C) dividends. 
D) a credit line.

Question 17

The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles. It is true that

Accepted Answer

A) they are both governmental agencies. 
B) the SEC is a private organization of accountants. 
C) the SEC often mandates guidelines when no accounting principles exist. 
D) the SEC and FASB rarely cooperate in developing accounting standards. 
A) they are both governmental agencies. 
B) the SEC is a private organization of accountants. 
C) the SEC often mandates guidelines when no accounting principles exist. 
D) the SEC and FASB rarely cooperate in developing accounting standards.

Question 18

Transactions that can be measured in dollars and cents are recorded in the financial information system.

Accepted Answer

A) True 
 B)False

Question 19

Centro-matic Company began the year with stockholders' equity of $30,000. During the year, Centro-matic issued additional shares of stock in exchange for cash of $42,000, recorded expenses of $120,000, and paid dividends of $8,000. If Centro-matic's ending stockholders' equity was $112,000, what was the company's revenue for the year?

Accepted Answer

A) $160,000. 
B) $168,000. 
C) $202,000. 
D) $210,000. 
A) $160,000. 
B) $168,000. 
C) $202,000. 
D) $210,000.

Question 20

GAAP stands for

Accepted Answer

A) Generally Accepted Auditing Procedures. 
B) Generally Accepted Accounting Principles. 
C) Generally Accepted Auditing Principles. 
D) Generally Accepted Accounting Procedures. 
A) Generally Accepted Auditing Procedures. 
B) Generally Accepted Accounting Principles. 
C) Generally Accepted Auditing Principles. 
D) Generally Accepted Accounting Procedures.

The primary accounting standard-setting body in the United States is the

The purchase of office equipment on credit increases total assets and total liabilities.

If a corporation distributes cash to its stockholders, then

Net income results when

Accounting information is used only by external users with a financial interest in a business enterprise.

Sources of increases to stockholder's equity are

Identifying is the process of keeping a chronological diary of events measured in dollars and cents.

Liabilities

A small neighborhood barber shop that is operated by its owner would likely be organized as a

U.S. standards are referred to as

Owners' claims to total business assets take precedence over the claims of creditors because owners invest assets in the business and are liable for losses.

The ending retained earnings amount is shown on

If supplies that have been purchased are used in the course of business, then

If total liabilities increased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

Financial accounting ethics violations are

When assets are distributed to the owners of a corporation, these distributions are termed

The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles. It is true that

Transactions that can be measured in dollars and cents are recorded in the financial information system.

GAAP stands for

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 primary accounting standard-setting body in the United States is the

The purchase of office equipment on credit increases total assets and total liabilities.

If a corporation distributes cash to its stockholders, then

Net income results when

Accounting information is used only by external users with a financial interest in a business enterprise.

Sources of increases to stockholder's equity are

Identifying is the process of keeping a chronological diary of events measured in dollars and cents.

Liabilities

A small neighborhood barber shop that is operated by its owner would likely be organized as a

U.S. standards are referred to as

Owners' claims to total business assets take precedence over the claims of creditors because owners invest assets in the business and are liable for losses.

The ending retained earnings amount is shown on

If supplies that have been purchased are used in the course of business, then

If total liabilities increased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

Financial accounting ethics violations are

When assets are distributed to the owners of a corporation, these distributions are termed

The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles. It is true that

Transactions that can be measured in dollars and cents are recorded in the financial information system.

GAAP stands for

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