Question 1

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

Accepted Answer

bookkeepin

Question 2

The Duce Company has five plants nationwide that cost $100 million. The current market value of the plants is $500 million. The plants will be recorded and reported as assets at

Accepted Answer

A)  $100 million. 
B)  $600 million. 
C)  $400 million. 
D)  $500 million. 
A)  $100 million. 
B)  $600 million. 
C)  $400 million. 
D)  $500 million.

Question 3

Classify each of these items as an asset (A), liability (L), or owner's equity (OE).
_____ 1. Accounts receivable
_____ 2. Accounts payable
_____ 3. Mantle's, Capital
_____ 4. Office supplies
_____ 5. Utilities expense
_____ 6. Cash
_____ 7. Note payable
_____ 8. Equipment

Accepted Answer

1. A 5. OE

Question 4

Below is a list of important abbreviations widely used in business. For each abbreviation give the full designation.
1. CPA
2. IRS
3. FBI
4. FASB
5. GAAP
6. SEC

Accepted Answer

1. Certified Public Accountant
2. Intern

Question 5

Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?

Accepted Answer

A)  Identification 
B)  Communication 
C)  Recording 
D)  Analysis 
A)  Identification 
B)  Communication 
C)  Recording 
D)  Analysis

Question 6

The Roy's Downtown Diner received a bill of $400 from the Emeril Advertising Agency. The owner, Roy James, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is

Accepted Answer

A)  a decrease in Cash and an increase in Accounts Payable. 
B)  a decrease in Cash and an increase in R. James, Capital. 
C)  an increase in Accounts Payable and a decrease in R. James, Capital. 
D)  a decrease in Accounts Payable and an increase in R. James, Capital. 
A)  a decrease in Cash and an increase in Accounts Payable. 
B)  a decrease in Cash and an increase in R. James, Capital. 
C)  an increase in Accounts Payable and a decrease in R. James, Capital. 
D)  a decrease in Accounts Payable and an increase in R. James, Capital.

Question 7

If total liabilities increased by $15,000 and owner's equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

Accepted Answer

A)  $20,000 decrease 
B)  $20,000 increase 
C)  $25,000 increase 
D)  $30,000 increase 
A)  $20,000 decrease 
B)  $20,000 increase 
C)  $25,000 increase 
D)  $30,000 increase

Question 8

If total liabilities decreased by $15,000 and owner's equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

Accepted Answer

A)  $20,000 increase 
B)  $10,000 decrease 
C)  $10,000 increase 
D)  $15,000 decrease 
A)  $20,000 increase 
B)  $10,000 decrease 
C)  $10,000 increase 
D)  $15,000 decrease

Question 9

Use the following information for questions 127-129.
Carla's Computer Repair Shop started the year with total assets of $270,000 and total liabilities of $180,000. During the year, the business recorded $450,000 in computer repair revenues, $255,000 in expenses, and Carla withdrew $45,000.
-Carla's Capital balance changed by what amount from the beginning of the year to the end of the year?

Accepted Answer

A)  $45,000 
B)  $195,000 
C)  $90,000 
D)  $150,000 
A)  $45,000 
B)  $195,000 
C)  $90,000 
D)  $150,000

Question 10

A business organized as a corporation

Accepted Answer

A)  is not a separate legal entity in most states. 
B)  requires that stockholders be personally liable for the debts of the business. 
C)  is owned by its stockholders. 
D)  terminates when one of its original stockholders dies. 
A)  is not a separate legal entity in most states. 
B)  requires that stockholders be personally liable for the debts of the business. 
C)  is owned by its stockholders. 
D)  terminates when one of its original stockholders dies.

Question 11

Don Jones is the proprietor (owner) of Donny's, a retailer of golf apparel. When recording the financial transactions of Donny's, Don does not record an entry for a car he purchased for personal use. Don took out a personal loan to pay for the car. What accounting concept guides Don's behavior in this situation?

Accepted Answer

A)  Pay back concept 
B)  Economic entity assumption 
C)  Cash basis concept 
D)  Monetary unit assumption 
A)  Pay back concept 
B)  Economic entity assumption 
C)  Cash basis concept 
D)  Monetary unit assumption

Question 12

Nguyen Company began the year with owner's equity of $217,000. During the year, Nguyen received additional owner investments of $294,000, recorded expenses of $840,000, and had owner drawings of $56,000. If Nguyen's ending owner's equity was $531,000, what was the company's revenue for the year?

Accepted Answer

A)  $860,000 
B)  $916,000 
C)  $1,154,000 
D)  $1,210,000 
A)  $860,000 
B)  $916,000 
C)  $1,154,000 
D)  $1,210,000

Question 13

Owners of business firms are the only people who need accounting information.

Accepted Answer

A) True 
 B)False

Question 14

The economic entity assumption requires that the activities of an entity be kept separate and distinct from the activities of its owner and all other economic entities.

Accepted Answer

A) True 
 B)False

Question 15

An analysis of the transactions made by K. T. Lang & Co., a law firm, for the month of July is shown below. Each increase and decrease in owner's equity is explained.   
Instructions
Prepare a balance sheet at July 31, 2010.

Accepted Answer

The answer of An analysis of the transactions made by...

Question 16

In order to possess future service potential, an asset must have physical substance.

Accepted Answer

A) True 
 B)False

Question 17

The following transactions represent part of the activities of Tigger Company for the first month of its existence. Indicate the effect of each transaction upon the total assets of the business by one of the following phrases: increased total assets, decreased total assets, or no change in total assets.
(a) The owner invested cash to start the business.
(b) Purchased a computer for cash.
(c) Purchased office equipment with money borrowed from the bank.
(d) Paid the first month's utility bill.
(e) Collected an accounts receivable.
(f) Owner withdrew cash from the business.

Accepted Answer

(a) Increased total assets.
(b

Question 18

Use the following information for questions 127-129.
Carla's Computer Repair Shop started the year with total assets of $270,000 and total liabilities of $180,000. During the year, the business recorded $450,000 in computer repair revenues, $255,000 in expenses, and Carla withdrew $45,000.
-Carla's Capital balance at the end of the year was

Accepted Answer

A)  $240,000. 
B)  $225,000. 
C)  $285,000. 
D)  $195,000. 
A)  $240,000. 
B)  $225,000. 
C)  $285,000. 
D)  $195,000.

Question 19

The accounting equation for Gudgeyes Enterprises is as follows:   If Gudgeyes purchases office equipment on account for $12,000, the accounting equation will change to

Accepted Answer

The answer of The accounting equation for Gudgeyes Enterprises is...

Question 20

Copper Company's owner's equity at the beginning of August 2009 was $300,000. During the month, the company earned net income of $60,000 and owner's drawings were $20,000. At the end of August 2009, what is the balance in owner's equity?

Accepted Answer

A)  $260,000 
B)  $300,000 
C)  $340,000 
D)  $380,000 
A)  $260,000 
B)  $300,000 
C)  $340,000 
D)  $380,000

Exam 1: Accounting in Action

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

The Duce Company has five plants nationwide that cost $100 million. The current market value of the plants is $500 million. The plants will be recorded and reported as assets at

Classify each of these items as an asset (A), liability (L), or owner's equity (OE). _____ 1. Accounts receivable _____ 2. Accounts payable _____ 3. Mantle's, Capital _____ 4. Office supplies _____ 5. Utilities expense _____ 6. Cash _____ 7. Note payable _____ 8. Equipment

Below is a list of important abbreviations widely used in business. For each abbreviation give the full designation. 1. CPA 2. IRS 3. FBI 4. FASB 5. GAAP 6. SEC

Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?

The Roy's Downtown Diner received a bill of $400 from the Emeril Advertising Agency. The owner, Roy James, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is

If total liabilities increased by $15,000 and owner's equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

If total liabilities decreased by $15,000 and owner's equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

A business organized as a corporation

Nguyen Company began the year with owner's equity of $217,000. During the year, Nguyen received additional owner investments of $294,000, recorded expenses of $840,000, and had owner drawings of $56,000. If Nguyen's ending owner's equity was $531,000, what was the company's revenue for the year?

Owners of business firms are the only people who need accounting information.

The economic entity assumption requires that the activities of an entity be kept separate and distinct from the activities of its owner and all other economic entities.

An analysis of the transactions made by K. T. Lang & Co., a law firm, for the month of July is shown below. Each increase and decrease in owner's equity is explained. Instructions Prepare a balance sheet at July 31, 2010.

In order to possess future service potential, an asset must have physical substance.

The accounting equation for Gudgeyes Enterprises is as follows: If Gudgeyes purchases office equipment on account for $12,000, the accounting equation will change to

Copper Company's owner's equity at the beginning of August 2009 was $300,000. During the month, the company earned net income of $60,000 and owner's drawings were $20,000. At the end of August 2009, what is the balance in owner's equity?

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

Filters

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

Classify each of these items as an asset (A), liability (L), or owner's equity (OE). ___ 1. Accounts receivable _ 2. Accounts payable _ 3. Mantle's, Capital _ 4. Office supplies _ 5. Utilities expense _ 6. Cash _ 7. Note payable ___ 8. Equipment