Question 1

The body of theory underlying accounting is not based on

Accepted Answer

A)  physical laws of nature. 
B)  concepts. 
C)  principles. 
D)  definitions. 
A)  physical laws of nature. 
B)  concepts. 
C)  principles. 
D)  definitions.

Question 2

Use the following information for questions 140-141.
Metzger Company compiled the following financial information as of December 31, 2008:  
-Metzger's assets on December 31, 2009 are

Accepted Answer

A)  $235,000. 
B)  $170,000. 
C)  $80,000. 
D) $95,000. 
A)  $235,000. 
B)  $170,000. 
C)  $80,000. 
D) $95,000.

Question 3

If services are rendered for credit, then

Accepted Answer

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

Question 4

Liabilities of a company would not include

Accepted Answer

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

Question 5

The organization(s) primarily responsible for establishing generally accepted accounting principles is(are) the

Accepted Answer

The answer of The organization(s) primarily responsible for establishing generally...

Question 6

Revenues are

Accepted Answer

A)  the cost of assets consumed during the period. 
B)  gross increases in owner's equity resulting from business activities. 
C)  the cost of services used during the period. 
D)  actual or expected cash outflows. 
A)  the cost of assets consumed during the period. 
B)  gross increases in owner's equity resulting from business activities. 
C)  the cost of services used during the period. 
D)  actual or expected cash outflows.

Question 7

Which of the following would not be considered an external user of accounting data for the GHI Company?

Accepted Answer

A)  Internal Revenue Service Agent 
B)  Management 
C)  Creditors 
D)  Customers 
A)  Internal Revenue Service Agent 
B)  Management 
C)  Creditors 
D)  Customers

Question 8

The final step in solving an ethical dilemma is to

Accepted Answer

A)  identify and analyze the principal elements in the situation. 
B)  recognize an ethical situation. 
C)  identify the alternatives and weigh the impact of each alternative on stakeholders. 
D)  recognize the ethical issues involved. 
A)  identify and analyze the principal elements in the situation. 
B)  recognize an ethical situation. 
C)  identify the alternatives and weigh the impact of each alternative on stakeholders. 
D)  recognize the ethical issues involved.

Question 9

At the time an asset is acquired, cost and value should be the same.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?

Accepted Answer

A)  The appointment of a new CPA firm to perform an audit. 
B)  The purchase of a new computer. 
C)  The sale of store equipment. 
D)  Payment of income taxes. 
A)  The appointment of a new CPA firm to perform an audit. 
B)  The purchase of a new computer. 
C)  The sale of store equipment. 
D)  Payment of income taxes.

Question 11

The ending owner's equity amount is shown on

Accepted Answer

A)  the balance sheet only. 
B)  the owner's equity statement only. 
C)  both the income statement and the owner's equity statement. 
D)  both the balance sheet and the owner's equity statement. 
A)  the balance sheet only. 
B)  the owner's equity statement only. 
C)  both the income statement and the owner's equity statement. 
D)  both the balance sheet and the owner's equity statement.

Question 12

All of the following are services offered by public accountants except

Accepted Answer

A)  budgeting. 
B)  auditing. 
C)  tax planning. 
D)  consulting. 
A)  budgeting. 
B)  auditing. 
C)  tax planning. 
D)  consulting.

Question 13

There are ten transactions listed below. Match the transactions that have the identical effect on the accounting equation. You should end up with 5 matches.
a. Receive cash from customers on account.
b. Initial cash contribution by an owner.
c. Pay cash to reduce an accounts payable.
d. Purchase supplies for cash.
e. Pay cash to reduce a notes payable.
f. Purchase supplies on account.
g. Additional cash contribution by an owner.
h. Purchase equipment with a note payable.
i. Pay utilities with cash.
j. Owner withdraws money from the business for personal use.

Accepted Answer

Match #1 = a, d
#2 =

Question 14

Owner's equity is best depicted by the following:

Accepted Answer

A)  Assets = Liabilities. 
B)  Liabilities + Assets. 
C)  Residual equity + Assets. 
D)  Assets - Liabilities. 
A)  Assets = Liabilities. 
B)  Liabilities + Assets. 
C)  Residual equity + Assets. 
D)  Assets - Liabilities.

Question 15

Internal transactions do not affect the basic accounting equation because they are economic events that occur entirely within one company.

Accepted Answer

A) True 
 B)False

Question 16

Presented below is information related to the sole proprietorship of Anthony Scalici, consultant.   
Instructions
Prepare the 2010 owner's equity statement for Anthony Scalici's consulting company.

Accepted Answer

The answer of Presented below is information related to the...

Question 17

A problem with the monetary unit assumption is that

Accepted Answer

A)  the dollar has not been stable over time. 
B)  the dollar has been stable over time. 
C)  the dollar is a common medium of exchange. 
D)  it is impossible to account for international transactions. 
A)  the dollar has not been stable over time. 
B)  the dollar has been stable over time. 
C)  the dollar is a common medium of exchange. 
D)  it is impossible to account for international transactions.

Question 18

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 19

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

Accepted Answer

A) True 
 B)False

Question 20

The purchase of store equipment for cash reduces the owner's equity by an equal amount.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Action

The body of theory underlying accounting is not based on

Use the following information for questions 140-141. Metzger Company compiled the following financial information as of December 31, 2008: -Metzger's assets on December 31, 2009 are

If services are rendered for credit, then

Liabilities of a company would not include

The organization(s) primarily responsible for establishing generally accepted accounting principles is(are) the

Revenues are

Which of the following would not be considered an external user of accounting data for the GHI Company?

The final step in solving an ethical dilemma is to

At the time an asset is acquired, cost and value should be the same.

Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?

The ending owner's equity amount is shown on

All of the following are services offered by public accountants except

Owner's equity is best depicted by the following:

Internal transactions do not affect the basic accounting equation because they are economic events that occur entirely within one company.

Presented below is information related to the sole proprietorship of Anthony Scalici, consultant. Instructions Prepare the 2010 owner's equity statement for Anthony Scalici's consulting company.

A problem with the monetary unit assumption is that

Auditing is

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

The purchase of store equipment for cash reduces the owner's equity by an equal amount.

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 Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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