Question 1

The study of accounting is not useful for a business career unless your career objective is to become an accountant.

Accepted Answer

A) True 
 B)False

Question 2

A basic assumption of accounting assumes that the dollar is

Accepted Answer

A)  unrelated to business transactions. 
B)  a poor measure of economic activities. 
C)  the common unit of measure for all business transactions. 
D)  useless in measuring an economic event. 
A)  unrelated to business transactions. 
B)  a poor measure of economic activities. 
C)  the common unit of measure for all business transactions. 
D)  useless in measuring an economic event.

Question 3

Match between columns
                        Premises: Is the company operating within prescribed guidelines?
Is the company complying with tax laws?
Is the company able to pay its debts?
Is the company a good investment?

Accepted Answer

The Answer of Creditor and Investor and Regulatory Agency and is...

Question 4

If total liabilities decreased by $60000 and owner's equity increased by $30000 during a period of time then total assets must change by what amount and direction during that same period?

Accepted Answer

A)  $90000 decrease 
B)  $30000 decrease 
C)  $30000 increase 
D)  $90000 increase 
A)  $90000 decrease 
B)  $30000 decrease 
C)  $30000 increase 
D)  $90000 increase

Question 5

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 6

Which of the following is not part of the accounting process?

Accepted Answer

A)  Recording 
B)  Identifying 
C)  Financial decision making 
D)  Communicating 
A)  Recording 
B)  Identifying 
C)  Financial decision making 
D)  Communicating

Question 7

Proprietorships partnerships and corporations

Accepted Answer

A)  are the three most common forms of business organizations in the U.S. 
B)  are the three most common forms of business organizations internationally. 
C)  are used in different proportions in different countries. 
D)  all of these answer choices are correct. 
A)  are the three most common forms of business organizations in the U.S. 
B)  are the three most common forms of business organizations internationally. 
C)  are used in different proportions in different countries. 
D)  all of these answer choices are correct.

Question 8

Liabilities of a company would not include

Accepted Answer

A)  notes payable. 
B)  accounts payable. 
C)  salaries and wages payable. 
D)  cash. 
A)  notes payable. 
B)  accounts payable. 
C)  salaries and wages payable. 
D)  cash.

Question 9

Accountants refer to an economic event as a

Accepted Answer

A)  purchase. 
B)  sale. 
C)  transaction. 
D)  change in ownership. 
A)  purchase. 
B)  sale. 
C)  transaction. 
D)  change in ownership.

Question 10

Which one of the following is not an external user of accounting information?

Accepted Answer

A)  Regulatory agencies. 
B)  Customers. 
C)  Investors. 
D)  All of these answers choices are external users. 
A)  Regulatory agencies. 
B)  Customers. 
C)  Investors. 
D)  All of these answers choices are external users.

Question 11

The primary accounting standard-setting body in the United States is the International Accounting Standards Board.

Accepted Answer

A) True 
 B)False

Question 12

For each of the following indicate whether the transaction affects revenue (R) expense (E) owner's drawing (D) owner's investment (I) or no effect on owner's equity (NOE).
1. Made an investment to start the business.
2. Billed customers for services performed.
3. Purchased equipment on account.
4. Paid monthly rent.
5. Withdrew cash for personal use.

Accepted Answer

1. Investment (I)
2.

Question 13

Mellon Company purchases $1500 of equipment from Office Equipment Inc. for cash. The effect on the components of the basic accounting equation of Mellon 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 14

Luis Consulting started the year with total assets of $60000 and total liabilities of $17000. During the year the business recorded $48000 in consulting revenues and $36000 in expenses. Luis made an additional investment of $8000 and withdrew cash of $9000 during the year. The owner's equity at the end of the year was

Accepted Answer

A)  $33000. 
B)  $54000. 
C)  $57000. 
D)  $63000. 
A)  $33000. 
B)  $54000. 
C)  $57000. 
D)  $63000.

Question 15

The mere recording of economic events is called ______________ and is just one part of the _______________ process.

Accepted Answer

bookkeepin

Question 16

If owner's equity increases from the beginning of the year to the end of the year then

Accepted Answer

A)  net income is less than owner drawings. 
B)  a net loss is less than owner drawings. 
C)  additional owner investments are less than net losses. 
D)  net income plus investments is greater than owner drawings. 
A)  net income is less than owner drawings. 
B)  a net loss is less than owner drawings. 
C)  additional owner investments are less than net losses. 
D)  net income plus investments is greater than owner drawings.

Question 17

Which of the following events is not a business transaction?

Accepted Answer

A)  Investment of cash by the owner. 
B)  Hired employees. 
C)  Incurred utility expenses for the month. 
D)  Earned revenue for services provided. 
A)  Investment of cash by the owner. 
B)  Hired employees. 
C)  Incurred utility expenses for the month. 
D)  Earned revenue for services provided.

Question 18

Presented below are balance sheet items for Blue Lagoon Company at December 31 2016. $\begin{array}{lr}
\text { Accounts payable } & \$ 37,000 \
\text { Accounts receivable } & 39,000 \
\text { Cash } & 17,000 \
\text { Equipment } & 78,000 \
\text { Owner's capital } & 47,000 \
\text { Notes pavable } & 50,000
\end{array}$ Compute each of the following:
1. Total assets.
2. Total liabilities.

Accepted Answer

1. Total assets = $134000 ($39

Question 19

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 20

Indicate which of these items is an asset (A) liability (L) or owner's equity (OE) account. $\underline{\quad\quad}$(1) Supplies
$\underline{\quad\quad}$(2) Owner's Drawings
$\underline{\quad\quad}$(3) Buildings
$\underline{\quad\quad}$(4) Notes Payable
$\underline{\quad\quad}$(5) Salaries and Wages Payable

Accepted Answer

1.  Asset  ( A )
2.

Exam 1: Accounting in Action

The study of accounting is not useful for a business career unless your career objective is to become an accountant.

A basic assumption of accounting assumes that the dollar is

If total liabilities decreased by $60000 and owner's equity increased by $30000 during a period of time then total assets must change by what amount and direction during that same period?

Auditing is

Which of the following is not part of the accounting process?

Proprietorships partnerships and corporations

Liabilities of a company would not include

Accountants refer to an economic event as a

Which one of the following is not an external user of accounting information?

The primary accounting standard-setting body in the United States is the International Accounting Standards Board.

Mellon Company purchases $1500 of equipment from Office Equipment Inc. for cash. The effect on the components of the basic accounting equation of Mellon Company is

The mere recording of economic events is called ______________ and is just one part of the _______________ process.

If owner's equity increases from the beginning of the year to the end of the year then

Which of the following events is not a business transaction?

Presented below are balance sheet items for Blue Lagoon Company at December 31 2016. Accounts payable \ 37,000 Accounts receivable 39,000 Cash 17,000 Equipment 78,000 Owner's capital 47,000 Notes pavable 50,000 Compute each of the following: 1. Total assets. 2. Total liabilities.

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.

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

The mere recording of economic events is called and is just one part of the _ process.