Question 1

Rent expense that is paid with cash appears on which of the following statements?

Accepted Answer

A) Balance sheet 
B) Income statement 
C) Statement of retained earnings 
D) Schedule of accounts receivable 
E) Statement of cash received 
A) Balance sheet 
B) Income statement 
C) Statement of retained earnings 
D) Schedule of accounts receivable 
E) Statement of cash received B

Question 2

Consider the risk of the following investments.Choose the answer that lists the investments in order from highest expected return to lowest expected return.

Accepted Answer

A) Drilling exploration to discover oil,stock in a secure "blue chip" corporation,government bonds. 
B) Stock in a secure "blue chip" corporation,government bonds,drilling exploration to discover oil. 
C) Government bonds,drilling exploration to discover oil,stock in a secure "blue chip" corporation. 
D) Drilling exploration to discover oil,government bonds,stock in a secure "blue chip" corporation. 
E) Government bonds,stock in a secure "blue chip" corporation,drilling exploration to discover oil. 
A) Drilling exploration to discover oil,stock in a secure "blue chip" corporation,government bonds. 
B) Stock in a secure "blue chip" corporation,government bonds,drilling exploration to discover oil. 
C) Government bonds,drilling exploration to discover oil,stock in a secure "blue chip" corporation. 
D) Drilling exploration to discover oil,government bonds,stock in a secure "blue chip" corporation. 
E) Government bonds,stock in a secure "blue chip" corporation,drilling exploration to discover oil. A

Question 3

Every business transaction should leave the accounting equation in balance.

Accepted Answer

A) True 
 B)False  True

Question 4

The principle prescribing that financial statements reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:

Accepted Answer

A) Going-concern principle 
B) Business entity principle 
C) Objectivity principle 
D) Cost principle 
E) Monetary unit principle 
A) Going-concern principle 
B) Business entity principle 
C) Objectivity principle 
D) Cost principle 
E) Monetary unit principle

Question 5

A company has twice as much owner's equity as it does liabilities.If total liabilities are $50,000,what amount of assets are owned by the company?

Accepted Answer

A) $50,000 
B) $100,000 
C) $150,000 
D) $200,000 
E) Assets cannot be determined from the given information. 
A) $50,000 
B) $100,000 
C) $150,000 
D) $200,000 
E) Assets cannot be determined from the given information.

Question 6

Which of the following statements best describes the relationship of U.S.GAAP and IFRS?

Accepted Answer

A) They are identical. 
B) They are entirely different conceptual frameworks. 
C) They are similar but not identical. 
D) Neither has anything to do with accounting. 
E) They both relate only to publicly traded companies. 
A) They are identical. 
B) They are entirely different conceptual frameworks. 
C) They are similar but not identical. 
D) Neither has anything to do with accounting. 
E) They both relate only to publicly traded companies.

Question 7

Duffy Legal Services purchases office furniture for $3,200 cash.How would Duffy record this transaction?

Accepted Answer

A) Office Furniture increases by $3,200 and Accounts Payable increases by $3,200. 
B) Cash decreases by $3,200 and Accounts Payable increases by $3,200. 
C) Cash decreases by $3,200 and Office Furniture increases by $3,200. 
D) Cash decreases by $3,200 and Accounts Payable decreases by $3,200. 
E) Equipment increases by $3,200 and Cash decreases by $3,200. 
A) Office Furniture increases by $3,200 and Accounts Payable increases by $3,200. 
B) Cash decreases by $3,200 and Accounts Payable increases by $3,200. 
C) Cash decreases by $3,200 and Office Furniture increases by $3,200. 
D) Cash decreases by $3,200 and Accounts Payable decreases by $3,200. 
E) Equipment increases by $3,200 and Cash decreases by $3,200.

Question 8

The internal information users of a business include the managers of: research and development,distribution,and human resources.

Accepted Answer

A) True 
 B)False

Question 9

The characteristics below apply to at least one of the forms of business organization.
a.Is a separate legal entity?
b.Is allowed to be owned by one person only?
c.Owner or owners are personally liable for debts of the business.
d.Is a taxable entity?
e.Is a business entity?
f.May have a contract specifying the division of profits among the owners?
g.Has an unlimited life.
Use the following format to indicate (with a yes or no) whether or not a characteristic applies to each type of business organization.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 10

From the information given,prepare a November income statement.
On November 1 of the current year,Lois Bell began Lois Bell,Interior Design as a corporation with an initial investment of $50,000 cash.On November 30,her records showed the following (alphabetically arranged) selected accounts and amounts:

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 11

Risk is the amount of uncertainty about the return we expect to earn in the future.

Accepted Answer

A) True 
 B)False

Question 12

If the assets of a business increased $15,000 during a period of time and its equity decreased $4,000 during the same period,liabilities in the business must have:

Accepted Answer

A) Increased $11,000 
B) Decreased $11,000 
C) Increased $19,000 
D) Decreased $19,000 
E) Increased $61,000 
A) Increased $11,000 
B) Decreased $11,000 
C) Increased $19,000 
D) Decreased $19,000 
E) Increased $61,000

Question 13

The following information is available for Skate and Boards Rental Company.
   Using the above information prepare an income statement,statement of retained earnings,and statement of cash flows for the Skate and Boards Rental for 2014.Also,prepare its balance sheet as of December 31,2014.Assume that the cash balance at December 31,2013 is $70,000.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 14

Ending liabilities were $67,000,beginning equity was $87,000,common stock issued during year totaled $31,000,expenses for the year were $22,000,dividends declared totaled $13,000,ending equity for the year was $181,000,and beginning assets for the year were $222,000. What was revenue for the year?

Accepted Answer

A) $154,000 
B) $155,000 
C) $ 53,000 
D) $ 98,000 
E) $135,000 
A) $154,000 
B) $155,000 
C) $ 53,000 
D) $ 98,000 
E) $135,000

Question 15

A company spent $52,000 in cash for this period's advertising activities.Enter the appropriate amounts for this transaction into the accounting equation format shown below:

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 16

For each of the following transactions,identify the effects on the accounting equation.Use "+" to indicate an increase and "-" to indicate a decrease.Use "A","L" and "E" to indicate assets,liabilities,and equity,respectively.Part (a) has been completed as an example.

Accepted Answer

a.+A +E 
b.+A +L 
c.

Question 17

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Accepted Answer

A) Objectivity principle 
B) Realization principle 
C) Business entity principle 
D) Going-concern principle 
E) Revenue recognition principle 
A) Objectivity principle 
B) Realization principle 
C) Business entity principle 
D) Going-concern principle 
E) Revenue recognition principle

Question 18

External auditors audit the financial statements to verify that they are prepared according to generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 19

On December 15,2013,Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2014.Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2014 and not 2013?

Accepted Answer

A) Monetary unit principle 
B) Going-concern principle 
C) Cost principle 
D) Business entity principle 
E) Revenue recognition principle 
A) Monetary unit principle 
B) Going-concern principle 
C) Cost principle 
D) Business entity principle 
E) Revenue recognition principle

Question 20

The primary objective of financial accounting is to:

Accepted Answer

A) Serve the decision-making needs of internal users. 
B) Provide financial statements to help external users analyze and interpret an organization's activities. 
C) Monitor and control company activities. 
D) Provide information on both the costs and benefits of managing products and services. 
E) Know what,when and how much to produce. 
A) Serve the decision-making needs of internal users. 
B) Provide financial statements to help external users analyze and interpret an organization's activities. 
C) Monitor and control company activities. 
D) Provide information on both the costs and benefits of managing products and services. 
E) Know what,when and how much to produce.

Rent expense that is paid with cash appears on which of the following statements?

Consider the risk of the following investments.Choose the answer that lists the investments in order from highest expected return to lowest expected return.

Every business transaction should leave the accounting equation in balance.

The principle prescribing that financial statements reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:

A company has twice as much owner's equity as it does liabilities.If total liabilities are $50,000,what amount of assets are owned by the company?

Which of the following statements best describes the relationship of U.S.GAAP and IFRS?

Duffy Legal Services purchases office furniture for $3,200 cash.How would Duffy record this transaction?

The internal information users of a business include the managers of: research and development,distribution,and human resources.

Risk is the amount of uncertainty about the return we expect to earn in the future.

If the assets of a business increased $15,000 during a period of time and its equity decreased $4,000 during the same period,liabilities in the business must have:

Ending liabilities were $67,000,beginning equity was $87,000,common stock issued during year totaled $31,000,expenses for the year were $22,000,dividends declared totaled $13,000,ending equity for the year was $181,000,and beginning assets for the year were $222,000. What was revenue for the year?

A company spent $52,000 in cash for this period's advertising activities.Enter the appropriate amounts for this transaction into the accounting equation format shown below:

For each of the following transactions,identify the effects on the accounting equation.Use "+" to indicate an increase and "-" to indicate a decrease.Use "A","L" and "E" to indicate assets,liabilities,and equity,respectively.Part (a) has been completed as an example.

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

External auditors audit the financial statements to verify that they are prepared according to generally accepted accounting principles.

On December 15,2013,Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2014.Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2014 and not 2013?

The primary objective of financial accounting is to:

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 1: Introducing Financial Accounting

Rent expense that is paid with cash appears on which of the following statements?

Consider the risk of the following investments.Choose the answer that lists the investments in order from highest expected return to lowest expected return.

Every business transaction should leave the accounting equation in balance.

The principle prescribing that financial statements reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:

A company has twice as much owner's equity as it does liabilities.If total liabilities are $50,000,what amount of assets are owned by the company?

Which of the following statements best describes the relationship of U.S.GAAP and IFRS?

Duffy Legal Services purchases office furniture for $3,200 cash.How would Duffy record this transaction?

The internal information users of a business include the managers of: research and development,distribution,and human resources.

Risk is the amount of uncertainty about the return we expect to earn in the future.

If the assets of a business increased $15,000 during a period of time and its equity decreased $4,000 during the same period,liabilities in the business must have:

Ending liabilities were $67,000,beginning equity was $87,000,common stock issued during year totaled $31,000,expenses for the year were $22,000,dividends declared totaled $13,000,ending equity for the year was $181,000,and beginning assets for the year were $222,000. What was revenue for the year?

A company spent $52,000 in cash for this period's advertising activities.Enter the appropriate amounts for this transaction into the accounting equation format shown below:

For each of the following transactions,identify the effects on the accounting equation.Use "+" to indicate an increase and "-" to indicate a decrease.Use "A","L" and "E" to indicate assets,liabilities,and equity,respectively.Part (a) has been completed as an example.

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

External auditors audit the financial statements to verify that they are prepared according to generally accepted accounting principles.

On December 15,2013,Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2014.Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2014 and not 2013?

The primary objective of financial accounting is to:

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters