Question 1

Hamilton Lawn Service incurred $800 repair expense and paid the repair company in cash.Which account,besides Cash,decreased?

Accepted Answer

A)  Owner's capital 
B)  Accounts payable 
C)  Common stock 
D)  Accounts receivable 
A)  Owner's capital 
B)  Accounts payable 
C)  Common stock 
D)  Accounts receivable

Question 2

Tate Corporation purchased a building for its grocery store for $30,000 in 1970.Based on inflation estimates,the amount of this asset has been adjusted in the accounting records.The building is now reported at $75,000.Which of the following concepts or principles of accounting is being violated?

Accepted Answer

A)  Going-concern concept 
B)  Stable monetary unit concept 
C)  Entity concept 
D)  None of the above 
A)  Going-concern concept 
B)  Stable monetary unit concept 
C)  Entity concept 
D)  None of the above

Question 3

Which of the following concepts (or principles)require an assumption that the entity will remain in operation for the foreseeable future?

Accepted Answer

A)  Entity concept 
B)  Faithful representation principle 
C)  Going-concern concept 
D)  Cost principle 
A)  Entity concept 
B)  Faithful representation principle 
C)  Going-concern concept 
D)  Cost principle

Question 4

By looking at a statement of owner's equity,you can evaluate the effect of drawings on the ending balance in owner's equity.

Accepted Answer

A) True 
 B)False

Question 5

The owners' claims to the assets of the business are called:

Accepted Answer

A)  revenues. 
B)  liabilities. 
C)  owners' equity. 
D)  expenses. 
A)  revenues. 
B)  liabilities. 
C)  owners' equity. 
D)  expenses.

Question 6

A debt that a business owes to an outside party is called:

Accepted Answer

A)  an asset. 
B)  a liability. 
C)  stockholders' equity. 
D)  revenue. 
A)  an asset. 
B)  a liability. 
C)  stockholders' equity. 
D)  revenue.

Question 7

Owner's equity is $150,000 and total liabilities are $90,000.Total assets would be:

Accepted Answer

A)  $300,000. 
B)  $180,000. 
C)  $60,000. 
D)  $240,000. 
A)  $300,000. 
B)  $180,000. 
C)  $60,000. 
D)  $240,000.

Question 8

A corporation possesses all but one of the following characteristics.Which of the following is NOT a characteristic of a corporation?

Accepted Answer

A)  If a corporation cannot pay its debts, lenders can take the owners' personal assets to satisfy the obligations. 
B)  A corporation is a distinct entity in the eyes of the law. 
C)  Corporation ownership is divided into shares of stock. 
D)  A corporation is owned by shareholders or stockholders. 
A)  If a corporation cannot pay its debts, lenders can take the owners' personal assets to satisfy the obligations. 
B)  A corporation is a distinct entity in the eyes of the law. 
C)  Corporation ownership is divided into shares of stock. 
D)  A corporation is owned by shareholders or stockholders.

Question 9

On Jan.1,2012,William Kelly started Kelly's Computer Service by investing $10,000.On Jan.3,the business borrowed $10,000 from a creditor and executed a Note payable with the principal and interest to be due in one year.On Jan.5,the business purchased $12,000 of equipment for cash.On Jan.8,Kelly's rendered service to his first corporate client and earned $2,500 in cash.On Jan.12,Kelly's incurred repair expense of $1,200 and promised to pay the repair contractor the following month.On Jan.18,Kelly's rendered service to a new client in the amount of $6,000 "on account," (the client promised to pay the following month).At the end of January,Kelly took a withdrawal of $1,000.Please prepare an income statement for the month of January,a statement of owner's equity for the month of January,and a balance sheet at Jan.31,2012.

Accepted Answer

@#IMG-DLM&
Ratinal: This quest

Question 10

You can evaluate business performance in terms of profitability by analyzing which financial statement?

Accepted Answer

A)  Income statement 
B)  Balance sheet 
C)  Statement of cash flows 
D)  None of the above 
A)  Income statement 
B)  Balance sheet 
C)  Statement of cash flows 
D)  None of the above

Question 11

Which of the following amounts appears on both the income statement and the balance sheet?

Accepted Answer

A)  Total assets 
B)  Net income 
C)  Ending owner's equity 
D)  None of the above amounts appear on both 
A)  Total assets 
B)  Net income 
C)  Ending owner's equity 
D)  None of the above amounts appear on both

Question 12

Accounting standards are formulated by the:

Accepted Answer

A)  SEC. 
B)  AICPA. 
C)  FASB. 
D)  IRS. 
A)  SEC. 
B)  AICPA. 
C)  FASB. 
D)  IRS.

Question 13

GAAP refer to the set of accounting rules for international accounting.

Accepted Answer

A) True 
 B)False

Question 14

The income statement presents a summary of an entity's revenues and expenses for a period of time.Which of the following statements is TRUE?

Accepted Answer

A)  There is net income when total revenues are greater than total expenses. 
B)  There is a net loss when total expenses are greater than total revenue. 
C)  There is a net loss when withdrawals are made. 
D)  Both A and B are true. 
A)  There is net income when total revenues are greater than total expenses. 
B)  There is a net loss when total expenses are greater than total revenue. 
C)  There is a net loss when withdrawals are made. 
D)  Both A and B are true.

Question 15

Scott's Camera Shop started the year with total assets of $80,000 and total liabilities of $40,000.During the year,the business earned revenues of $120,000 and incurred expenses of $70,000.Scott made no capital contributions during the year,but did make withdrawals of $60,000. 
-What is the amount of Scott's net income for the year?

Accepted Answer

A)  $50,000 
B)  $10,000 
C)  $30,000 
D)  $40,000 
A)  $50,000 
B)  $10,000 
C)  $30,000 
D)  $40,000

Question 16

Sharon Samson starts a plumbing service named Reliable Waterworks.Selected transactions are described as follows:
A.Sharon deposits $7,000 into a new checking account for the business,recording the capital contribution.
B.Reliable pays $4,000 cash for equipment to be used for plumbing repairs.
C.Reliable borrows $15,000 from a local bank and deposits the money in the checking account.
D.Reliable pays $600 rent for the first month.
E.Reliable pays $400 cash for plumbing supplies to be used on various jobs in the future.
F.Reliable completes a plumbing repair project for a local lawyer and receives $1,300 cash.
G.Sharon takes a cash withdrawal of $2,500.
After all of the transactions,what is the amount of total assets?

Accepted Answer

A) $25,700 
B) $5,200 
C) $24,200 
D) $20,200 
A) $25,700 
B) $5,200 
C) $24,200 
D) $20,200

Question 17

The faithful representation principle requires that information is complete,neutral and free from material error.

Accepted Answer

A) True 
 B)False

Question 18

Businesses can be organized in a variety of forms.The types of businesses commonly found in the U.S.include all of the following EXCEPT:

Accepted Answer

A)  corporations. 
B)  state government-run companies. 
C)  partnerships. 
D)  proprietorships. 
A)  corporations. 
B)  state government-run companies. 
C)  partnerships. 
D)  proprietorships.

Question 19

Beginning owner's capital is $20,000.No capital contributions were made during the year.Drawings were $7,000.Ending owner's capital is $37,000.What was net income?

Accepted Answer

A)  $24,000 
B)  $13,000 
C)  $10,000 
D)  $27,000 
A)  $24,000 
B)  $13,000 
C)  $10,000 
D)  $27,000

Question 20

Accounting is "the language of business."

Accepted Answer

A) True 
 B)False

Hamilton Lawn Service incurred $800 repair expense and paid the repair company in cash.Which account,besides Cash,decreased?

Tate Corporation purchased a building for its grocery store for $30,000 in 1970.Based on inflation estimates,the amount of this asset has been adjusted in the accounting records.The building is now reported at $75,000.Which of the following concepts or principles of accounting is being violated?

Which of the following concepts (or principles)require an assumption that the entity will remain in operation for the foreseeable future?

By looking at a statement of owner's equity,you can evaluate the effect of drawings on the ending balance in owner's equity.

The owners' claims to the assets of the business are called:

A debt that a business owes to an outside party is called:

Owner's equity is $150,000 and total liabilities are $90,000.Total assets would be:

A corporation possesses all but one of the following characteristics.Which of the following is NOT a characteristic of a corporation?

You can evaluate business performance in terms of profitability by analyzing which financial statement?

Which of the following amounts appears on both the income statement and the balance sheet?

Accounting standards are formulated by the:

GAAP refer to the set of accounting rules for international accounting.

The income statement presents a summary of an entity's revenues and expenses for a period of time.Which of the following statements is TRUE?

The faithful representation principle requires that information is complete,neutral and free from material error.

Businesses can be organized in a variety of forms.The types of businesses commonly found in the U.S.include all of the following EXCEPT:

Beginning owner's capital is $20,000.No capital contributions were made during the year.Drawings were $7,000.Ending owner's capital is $37,000.What was net income?

Accounting is "the language of business."

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 1: Accounting and the Business Environment

Hamilton Lawn Service incurred $800 repair expense and paid the repair company in cash.Which account,besides Cash,decreased?

Tate Corporation purchased a building for its grocery store for $30,000 in 1970.Based on inflation estimates,the amount of this asset has been adjusted in the accounting records.The building is now reported at $75,000.Which of the following concepts or principles of accounting is being violated?

Which of the following concepts (or principles)require an assumption that the entity will remain in operation for the foreseeable future?

By looking at a statement of owner's equity,you can evaluate the effect of drawings on the ending balance in owner's equity.

The owners' claims to the assets of the business are called:

A debt that a business owes to an outside party is called:

Owner's equity is $150,000 and total liabilities are $90,000.Total assets would be:

A corporation possesses all but one of the following characteristics.Which of the following is NOT a characteristic of a corporation?

You can evaluate business performance in terms of profitability by analyzing which financial statement?

Which of the following amounts appears on both the income statement and the balance sheet?

Accounting standards are formulated by the:

GAAP refer to the set of accounting rules for international accounting.

The income statement presents a summary of an entity's revenues and expenses for a period of time.Which of the following statements is TRUE?

The faithful representation principle requires that information is complete,neutral and free from material error.

Businesses can be organized in a variety of forms.The types of businesses commonly found in the U.S.include all of the following EXCEPT:

Beginning owner's capital is $20,000.No capital contributions were made during the year.Drawings were $7,000.Ending owner's capital is $37,000.What was net income?

Accounting is "the language of business."

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters