Question 1

Typical steps needed before a business can start selling goods and/or services to customers include:

Accepted Answer

A)  financing and investing activities. 
B)  only financing activities. 
C)  only investing activities. 
D)  only operating activities. 
A)  financing and investing activities. 
B)  only financing activities. 
C)  only investing activities. 
D)  only operating activities. A

Question 2

A ledger is used to:

Accepted Answer

A)  show increases and decreases in individual accounts, as well as ending balance. 
B)  report the results of operations to stockholders, creditors, and managers. 
C)  prove that debits equal credits. 
D)  make a balance sheet unnecessary. 
A)  show increases and decreases in individual accounts, as well as ending balance. 
B)  report the results of operations to stockholders, creditors, and managers. 
C)  prove that debits equal credits. 
D)  make a balance sheet unnecessary. A

Question 3

-Use the information above to answer the following question.What is the amount of Total Assets on the balance sheet?

Accepted Answer

A)  $240,116. 
B)  $214,300. 
C)  $442,924. 
D)  $480,232. 
A)  $240,116. 
B)  $214,300. 
C)  $442,924. 
D)  $480,232. A

Question 4

T-accounts represent a simplified version of the:

Accepted Answer

A)  ledger. 
B)  journal. 
C)  trial balance. 
D)  financial statements. 
A)  ledger. 
B)  journal. 
C)  trial balance. 
D)  financial statements.

Question 5

A business is obliged to repay both debt and equity financing.

Accepted Answer

A) True 
 B)False

Question 6

-Use the information above to answer the following question.What is the total of the credit balance accounts?

Accepted Answer

A)  $111,040. 
B)  $104,090. 
C)  $113,540. 
D)  $108,590. 
A)  $111,040. 
B)  $104,090. 
C)  $113,540. 
D)  $108,590.

Question 7

The normal balance of an account is on the same side that increases the account.

Accepted Answer

A) True 
 B)False

Question 8

Which events are recorded in the accounting system?

Accepted Answer

A)  External exchanges only 
B)  Internal events only 
C)  Both external exchanges and internal events 
D)  Transactions are not recorded in the accounting system 
A)  External exchanges only 
B)  Internal events only 
C)  Both external exchanges and internal events 
D)  Transactions are not recorded in the accounting system

Question 9

Company X issues $40 million in new stock for cash.This does not affect stockholders' equity because as new shares are sold,the value of existing shares falls.

Accepted Answer

A) True 
 B)False

Question 10

The classified balance sheet for a company reported current assets of $1,623,850, total liabilities of $799,540, Common Stock of $1,000,000, and Retained Earnings of $130,260.The current ratio was 2.5.
-Use the information above to answer the following question.What is the total amount of noncurrent assets?

Accepted Answer

A)  $493,590. 
B)  $824,310. 
C)  $649,540. 
D)  $305,950. 
A)  $493,590. 
B)  $824,310. 
C)  $649,540. 
D)  $305,950.

Question 11

Every transaction:

Accepted Answer

A)  increases one account and decreases another account. 
B)  has at least two effects on the basic accounting equation. 
C)  affects only balance sheet accounts or only income statement accounts. 
D)  is analyzed from the standpoint of the business owners. 
A)  increases one account and decreases another account. 
B)  has at least two effects on the basic accounting equation. 
C)  affects only balance sheet accounts or only income statement accounts. 
D)  is analyzed from the standpoint of the business owners.

Question 12

When accounts receivable are collected:

Accepted Answer

A)  stockholders' equity increases. 
B)  total assets increase. 
C)  total assets decrease. 
D)  the amount of total assets is unchanged. 
A)  stockholders' equity increases. 
B)  total assets increase. 
C)  total assets decrease. 
D)  the amount of total assets is unchanged.

Question 13

In April,Pizza Aroma hired a new employee at a rate of $1,000 per month to start work at the beginning of May.In April,Pizza Aroma should record:

Accepted Answer

A)  nothing, because an exchange of promises is not a transaction. 
B)  a $1,000 increase to Prepaid wages and a $1,000 decrease to Cash. 
C)  a $1,000 increase to Wage expense and a $1,000 decrease to Cash. 
D)  a $1,000 increase in Wages Payable and a $1,000 increase in Wages Expense. 
A)  nothing, because an exchange of promises is not a transaction. 
B)  a $1,000 increase to Prepaid wages and a $1,000 decrease to Cash. 
C)  a $1,000 increase to Wage expense and a $1,000 decrease to Cash. 
D)  a $1,000 increase in Wages Payable and a $1,000 increase in Wages Expense.

Question 14

A company was formed with $60,000 cash contributed by its owners in exchange for common stock.The company borrowed $30,000 from a bank.The company purchased $10,000 of inventory and paid cash for it.The company also purchased $70,000 of equipment by paying $10,000 in cash and issuing a note for the remainder.
-Use the information above to answer the following question.What is the amount of the total liabilities to be reported on the balance sheet?

Accepted Answer

A)  $60,000. 
B)  $0 
C)  $90,000. 
D)  $80,000. 
A)  $60,000. 
B)  $0 
C)  $90,000. 
D)  $80,000.

Question 15

If total assets increase,then either total liabilities or total stockholders' equity must also increase.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following would be treated as an accounting transaction for a gardening supply store?

Accepted Answer

A)  The company signed an agreement to rent store space at $200 month. 
B)  The vice president of the company spoke at a luncheon that contributed to enhancing the company's reputation as a responsible company. 
C)  The company ordered supplies for $500. 
D)  The company loaned $500 to an employee. 
A)  The company signed an agreement to rent store space at $200 month. 
B)  The vice president of the company spoke at a luncheon that contributed to enhancing the company's reputation as a responsible company. 
C)  The company ordered supplies for $500. 
D)  The company loaned $500 to an employee.

Question 17

On January 1,Year 3,New Works,Inc.'s assets were $300,000 and its stockholders' equity was $140,000.During the year,assets increased $15,000 and liabilities decreased $10,000.
Required:
Determine the amount of stockholders' equity at December 31,Year 3.

Accepted Answer

Beginning of the year:
Assets = Liabilit

Question 18

A company was formed with $60,000 cash contributed by its owners in exchange for common stock.The company borrowed $30,000 from a bank.The company purchased $10,000 of inventory and paid cash for it.The company also purchased $70,000 of equipment by paying $10,000 in cash and issuing a note for the remainder.
-Use the information above to answer the following question.What is the amount of the total assets to be reported on the balance sheet?

Accepted Answer

A)  $150,000. 
B)  $160,000. 
C)  $90,000. 
D)  $80,000. 
A)  $150,000. 
B)  $160,000. 
C)  $90,000. 
D)  $80,000.

Question 19

Sofa So Good,Inc.signs a contract with a programmer for the development of software that will be developed,delivered and paid for in the next year.The signing of the contract:

Accepted Answer

A)  has no effect on the account equation. 
B)  increases assets. 
C)  increases liabilities. 
D)  decreases stockholder's equity. 
A)  has no effect on the account equation. 
B)  increases assets. 
C)  increases liabilities. 
D)  decreases stockholder's equity.

Question 20

If the total dollar value of credits to an account exceeds the total dollar value of debits to that account,the ending balance of the account will be a debit balance.

Accepted Answer

A) True 
 B)False

Typical steps needed before a business can start selling goods and/or services to customers include:

A ledger is used to:

-Use the information above to answer the following question.What is the amount of Total Assets on the balance sheet?

T-accounts represent a simplified version of the:

A business is obliged to repay both debt and equity financing.

-Use the information above to answer the following question.What is the total of the credit balance accounts?

The normal balance of an account is on the same side that increases the account.

Which events are recorded in the accounting system?

Company X issues $40 million in new stock for cash.This does not affect stockholders' equity because as new shares are sold,the value of existing shares falls.

Every transaction:

When accounts receivable are collected:

In April,Pizza Aroma hired a new employee at a rate of $1,000 per month to start work at the beginning of May.In April,Pizza Aroma should record:

If total assets increase,then either total liabilities or total stockholders' equity must also increase.

Which of the following would be treated as an accounting transaction for a gardening supply store?

On January 1,Year 3,New Works,Inc.'s assets were $300,000 and its stockholders' equity was $140,000.During the year,assets increased $15,000 and liabilities decreased $10,000. Required: Determine the amount of stockholders' equity at December 31,Year 3.

Sofa So Good,Inc.signs a contract with a programmer for the development of software that will be developed,delivered and paid for in the next year.The signing of the contract:

If the total dollar value of credits to an account exceeds the total dollar value of debits to that account,the ending balance of the account will be a debit balance.

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

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Exam 2: Reporting Investing and Financing Results on the Balance Sheet

Typical steps needed before a business can start selling goods and/or services to customers include:

A ledger is used to:

-Use the information above to answer the following question.What is the amount of Total Assets on the balance sheet?

T-accounts represent a simplified version of the:

A business is obliged to repay both debt and equity financing.

-Use the information above to answer the following question.What is the total of the credit balance accounts?

The normal balance of an account is on the same side that increases the account.

Which events are recorded in the accounting system?

Company X issues $40 million in new stock for cash.This does not affect stockholders' equity because as new shares are sold,the value of existing shares falls.

Every transaction:

When accounts receivable are collected:

In April,Pizza Aroma hired a new employee at a rate of $1,000 per month to start work at the beginning of May.In April,Pizza Aroma should record:

If total assets increase,then either total liabilities or total stockholders' equity must also increase.

Which of the following would be treated as an accounting transaction for a gardening supply store?

On January 1,Year 3,New Works,Inc.'s assets were $300,000 and its stockholders' equity was $140,000.During the year,assets increased $15,000 and liabilities decreased $10,000. Required: Determine the amount of stockholders' equity at December 31,Year 3.

Sofa So Good,Inc.signs a contract with a programmer for the development of software that will be developed,delivered and paid for in the next year.The signing of the contract:

If the total dollar value of credits to an account exceeds the total dollar value of debits to that account,the ending balance of the account will be a debit balance.

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters