Question 1

The full disclosure principle:

Accepted Answer

A) Prescribes that accounting information is based on actual cost. 
B) Provides guidance on when a company must recognize revenue. 
C) Prescribes that a company report the details behind financial statements that would impact users' decisions. 
D) Prescribes that a company record the expenses it incurred to generate the revenue reported. 
E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold. 
A) Prescribes that accounting information is based on actual cost. 
B) Provides guidance on when a company must recognize revenue. 
C) Prescribes that a company report the details behind financial statements that would impact users' decisions. 
D) Prescribes that a company record the expenses it incurred to generate the revenue reported. 
E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Question 2

Return on assets is often stated in ratio form as the amount of income divided by assets invested.

Accepted Answer

A) True 
 B)False

Question 3

What is the balance sheet? What is its purpose?

Accepted Answer

The balance sheet is one of the four req

Question 4

The term ________ refers to a liability that promises a future outflow of resources.

Accepted Answer

The answer of The term ________ refers to a liability...

Question 5

All of the following are classified as assets except:

Accepted Answer

A) Accounts Receivable. 
B) Supplies. 
C) Equipment. 
D) Accounts Payable. 
E) Land. 
A) Accounts Receivable. 
B) Supplies. 
C) Equipment. 
D) Accounts Payable. 
E) Land.

Question 6

Marsha Bogswell is the sole stockholder of Bogswell Legal Services.Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

Accepted Answer

A) Monetary unit assumption. 
B) Going-concern assumption. 
C) Measurement (Cost)principle. 
D) Business entity assumption. 
E) Expense recognition (Matching)principle. 
A) Monetary unit assumption. 
B) Going-concern assumption. 
C) Measurement (Cost)principle. 
D) Business entity assumption. 
E) Expense recognition (Matching)principle.

Question 7

The income statement describes revenues earned and expenses incurred along with the resulting net income or loss over a specified period of time.

Accepted Answer

A) True 
 B)False

Question 8

If assets are $300,000 and liabilities are $192,000,then equity equals:

Accepted Answer

A) $108,000. 
B) $192,000. 
C) $300,000. 
D) $492,000. 
E) $792,000. 
A) $108,000. 
B) $192,000. 
C) $300,000. 
D) $492,000. 
E) $792,000.

Question 9

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

Accepted Answer

A) $61,000 increase. 
B) $37,000 increase. 
C) $7,000 decrease. 
D) $7,000 increase. 
E) $34,000 decrease. 
A) $61,000 increase. 
B) $37,000 increase. 
C) $7,000 decrease. 
D) $7,000 increase. 
E) $34,000 decrease.

Question 10

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

Accepted Answer

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

Question 11

The measurement principle prescribes that accounting information is based on subjective opinion rather than cost.

Accepted Answer

A) True 
 B)False

Question 12

If the liabilities of a company increased $92,000 during a period of time and equity in the
business decreased $30,000 during the same period,did the assets of the company increase or decrease? By what amount?

Accepted Answer

Assets increased by

Question 13

An example of an operating activity is:

Accepted Answer

A) Paying wages. 
B) Purchasing office equipment. 
C) Borrowing money from a bank. 
D) Selling stock. 
E) Paying off a loan. 
A) Paying wages. 
B) Purchasing office equipment. 
C) Borrowing money from a bank. 
D) Selling stock. 
E) Paying off a loan.

Question 14

The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity,pressure,and rationalization.

Accepted Answer

A) True 
 B)False

Question 15

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000,and dividends of $12,000.There were no stockholder investments during the year.Calculate the ending equity.

Accepted Answer

A) $(5,000). 
B) $29,000. 
C) $5,000. 
D) $99,000. 
E) $75,000. 
A) $(5,000). 
B) $29,000. 
C) $5,000. 
D) $99,000. 
E) $75,000.

Question 16

Auditors verify the effectiveness of internal controls.

Accepted Answer

A) True 
 B)False

Question 17

Operating activities include long-term borrowing and repaying cash from lenders,stockholder investments and dividends paid to stockholders.

Accepted Answer

A) True 
 B)False

Question 18

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 separately 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

The answer of The characteristics below apply to at least...

Question 19

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 20

Revenues are increases in equity (via net income)from a company's sales of products and services to customers.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

The full disclosure principle:

Return on assets is often stated in ratio form as the amount of income divided by assets invested.

What is the balance sheet? What is its purpose?

The term ________ refers to a liability that promises a future outflow of resources.

All of the following are classified as assets except:

Marsha Bogswell is the sole stockholder of Bogswell Legal Services.Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

The income statement describes revenues earned and expenses incurred along with the resulting net income or loss over a specified period of time.

If assets are $300,000 and liabilities are $192,000,then equity equals:

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

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

The measurement principle prescribes that accounting information is based on subjective opinion rather than cost.

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period,did the assets of the company increase or decrease? By what amount?

An example of an operating activity is:

The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity,pressure,and rationalization.

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000,and dividends of $12,000.There were no stockholder investments during the year.Calculate the ending equity.

Auditors verify the effectiveness of internal controls.

Operating activities include long-term borrowing and repaying cash from lenders,stockholder investments and dividends paid to stockholders.

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

Revenues are increases in equity (via net income)from a company's sales of products and services to customers.

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

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