Question 1

The first step in solving an ethical dilemma is to

Accepted Answer

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

Question 2

Which of the following is not a characteristic of the cost principle?

Accepted Answer

A)  Reliability 
B)  Subjectivity 
C)  Objectivity 
D)  Verifiability 
A)  Reliability 
B)  Subjectivity 
C)  Objectivity 
D)  Verifiability

Question 3

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.
-The net income reported by Carla's Computer Repair Shop for the year was

Accepted Answer

A)  $150,000. 
B)  $195,000. 
C)  $90,000. 
D)  $405,000. 
A)  $150,000. 
B)  $195,000. 
C)  $90,000. 
D)  $405,000.

Question 4

Owner's equity is often referred to as

Accepted Answer

A)  residual equity. 
B)  leftovers. 
C)  spoils. 
D)  second equity. 
A)  residual equity. 
B)  leftovers. 
C)  spoils. 
D)  second equity.

Question 5

Identify the impact on the accounting equation of each of the following transactions.
1. Purchase office supplies on account.
2. Paid secretary weekly salary.
3. Purchased office furniture for cash.
4. Received monthly utility bill to be paid at later time.

Accepted Answer

1. Increase assets and increas

Question 6

The cost of an asset and its fair market 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 7

For each of the following, describe a transaction that will have the stated effect on the elements of the accounting equation.
(a) Increase one asset and decrease another asset.
(b) Increase an asset and increase a liability.
(c) Decrease an asset and decrease a liability.
(d) Increase an asset and increase owner's equity.
(e) Increase one asset, decrease one asset, and increase a liability.

Accepted Answer

(a) Receive cash from customers on accou

Question 8

The basic accounting equation may be expressed as

Accepted Answer

A)  Assets = Equities. 
B)  Assets - Liabilities = Owner's Equity. 
C)  Assets = Liabilities + Owner's Equity. 
D)  all of these. 
A)  Assets = Equities. 
B)  Assets - Liabilities = Owner's Equity. 
C)  Assets = Liabilities + Owner's Equity. 
D)  all of these.

Question 9

Prepare an income statement, an owner's equity statement, and a balance sheet for the accupuncture practice of Bi Loi, from the items listed below for the month of September.

Accepted Answer

The answer of Prepare an income statement, an owner's equity...

Question 10

Pam Sophly was reviewing her business activities at the end of the year (2009) and decided to prepare an Owner's Equity Statement. At the beginning of the year her assets were $500,000 and her liabilities were $200,000. At the end of the year the assets had grown to $950,000 but liabilities had also increased to $350,000. The net income for the year was $420,000. Pam had withdrawn $120,000 during the year for his personal use.
Prepare an Owner's Equity Statement in good form.

Accepted Answer

The answer of Pam Sophly was reviewing her business activities...

Question 11

In the owner's equity statement, revenues are listed first, followed by expenses, and net income (or net loss).

Accepted Answer

A) True 
 B)False

Question 12

The assumption that the unit of measure remains sufficiently constant over time is part of the

Accepted Answer

A)  economic entity assumption. 
B)  cost principle. 
C)  historical cost principle. 
D)  monetary unit assumption. 
A)  economic entity assumption. 
B)  cost principle. 
C)  historical cost principle. 
D)  monetary unit assumption.

Question 13

Owner's equity is decreased by

Accepted Answer

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

Question 14

If expenses are paid in cash, then

Accepted Answer

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

Question 15

The basic accounting equation is in balance when the creditor and ownership claims against the business equal the assets.

Accepted Answer

A) True 
 B)False

Question 16

Marilu Company began the year with owner's equity of $15,000. During the year, Marilu received additional owner investments of $21,000, recorded expenses of $60,000, and had owner drawings of $4,000. If Marilu's ending owner's equity was $46,000, what was the company's revenue for the year?

Accepted Answer

A)  $70,000 
B)  $74,000 
C)  $91,000 
D)  $95,000 
A)  $70,000 
B)  $74,000 
C)  $91,000 
D)  $95,000

Question 17

Which of the following would not be considered internal users of accounting data for a company?

Accepted Answer

A)  The president of a company 
B)  The controller of a company 
C)  Creditors of a company 
D)  Salesmen of the company 
A)  The president of a company 
B)  The controller of a company 
C)  Creditors of a company 
D)  Salesmen of the company

Question 18

At the beginning of the year, Keats Company had total assets of $550,000 and total liabilities of $200,000. Answer the following questions viewing each situation as being independent of the others.
(1) If total assets increased $200,000 during the year, and total liabilities decreased $75,000, what is the amount of owner's equity at the end of the year?
(2) During the year, total liabilities increased $230,000 and owner's equity decreased $90,000. What is the amount of total assets at the end of the year?
(3) If total assets decreased $40,000 and owner's equity increased $130,000 during the year, what is the amount of total liabilities at the end of the year?

Accepted Answer

The answer of At the beginning of the year, Keats...

Question 19

Presented below is a balance sheet for Jim Henson Yard Service at December 31, 2008.   
The following additional data are available for the year which began on January 1: All expenses (excluding supplies expense) total $6,000. Supplies on January 1, were $11,000 and $5,000 of supplies were purchased during the year. Net income for the year was $8,000 and drawings were $6,000.
Instructions
Determine the following: (Show all computations.)
1. Supplies used during the year.
2. Total expenses for the year.
3. Service revenues for the year.
4. Jim Henson's capital balance on January 1.

Accepted Answer

The answer of Presented below is a balance sheet for...

Question 20

The hiring of a new company president is an economic event recorded by the financial information system.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Action

The first step in solving an ethical dilemma is to

Which of the following is not a characteristic of the cost principle?

Owner's equity is often referred to as

Identify the impact on the accounting equation of each of the following transactions. 1. Purchase office supplies on account. 2. Paid secretary weekly salary. 3. Purchased office furniture for cash. 4. Received monthly utility bill to be paid at later time.

The cost of an asset and its fair market value are

The basic accounting equation may be expressed as

Prepare an income statement, an owner's equity statement, and a balance sheet for the accupuncture practice of Bi Loi, from the items listed below for the month of September.

In the owner's equity statement, revenues are listed first, followed by expenses, and net income (or net loss).

The assumption that the unit of measure remains sufficiently constant over time is part of the

Owner's equity is decreased by

If expenses are paid in cash, then

The basic accounting equation is in balance when the creditor and ownership claims against the business equal the assets.

Marilu Company began the year with owner's equity of $15,000. During the year, Marilu received additional owner investments of $21,000, recorded expenses of $60,000, and had owner drawings of $4,000. If Marilu's ending owner's equity was $46,000, what was the company's revenue for the year?

Which of the following would not be considered internal users of accounting data for a company?

The hiring of a new company president is an economic event recorded by the financial information system.

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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