Question 1

The description of the relation between a company's assets,liabilities,and equity,which is expressed as Assets = Liabilities + Equity,is known as the:

Accepted Answer

A) Income statement equation. 
B) Accounting equation. 
C) Business equation. 
D) Return on equity ratio. 
E) Net income. 
A) Income statement equation. 
B) Accounting equation. 
C) Business equation. 
D) Return on equity ratio. 
E) Net income.

Question 2

A parcel of land is offered for sale at $600,000,is assessed for tax purposes at $500,000,is recognized by its purchasers as easily being worth $575,000,and is sold for $570,000.At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

Accepted Answer

$570,000.The Measurement (Cost

Question 3

How does the going-concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f

Question 4

Technology:

Accepted Answer

A) Has replaced accounting. 
B) Has not improved the clerical accuracy of accounting. 
C) Reduces the time,effort and cost of recordkeeping. 
D) In accounting has replaced the need for decision makers. 
E) In accounting is only available to large corporations. 
A) Has replaced accounting. 
B) Has not improved the clerical accuracy of accounting. 
C) Reduces the time,effort and cost of recordkeeping. 
D) In accounting has replaced the need for decision makers. 
E) In accounting is only available to large corporations.

Question 5

Owners of a corporation are called shareholders or stockholders.

Accepted Answer

A) True 
 B)False

Question 6

Billington Corp borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

Accepted Answer

A) Assets would decrease $80,000 and liabilities would decrease $80,000. 
B) Assets would decrease $80,000 and equity would increase $80,000. 
C) Assets would increase $80,000 and equity would decrease $80,000. 
D) Assets would increase $80,000 and liabilities would increase $80,000. 
E) Liabilities would decrease $80,000 and equity would increase $80,000. 
A) Assets would decrease $80,000 and liabilities would decrease $80,000. 
B) Assets would decrease $80,000 and equity would increase $80,000. 
C) Assets would increase $80,000 and equity would decrease $80,000. 
D) Assets would increase $80,000 and liabilities would increase $80,000. 
E) Liabilities would decrease $80,000 and equity would increase $80,000.

Question 7

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of stockholders' equity as of August 31 of the current year?

Accepted Answer

A) $49,100. 
B) $32,100. 
C) $12,100. 
D) $10,900. 
E) $30,900. 
A) $49,100. 
B) $32,100. 
C) $12,100. 
D) $10,900. 
E) $30,900.

Question 8

The Sarbanes-Oxley Act (SOX)requires documentation and verification of internal controls.It also emphasizes effective internal controls.

Accepted Answer

A) True 
 B)False

Question 9

Assets created by selling goods and services on credit are:

Accepted Answer

A) Accounts payable. 
B) Accounts receivable. 
C) Liabilities. 
D) Expenses. 
E) Equity. 
A) Accounts payable. 
B) Accounts receivable. 
C) Liabilities. 
D) Expenses. 
E) Equity.

Question 10

From an accounting perspective,an event is a happening that affects the accounting equation,but cannot be measured.

Accepted Answer

A) True 
 B)False

Question 11

Risk is the ________ about the return an investor expects to earn.

Accepted Answer

The answer of Risk is the ________ about the return...

Question 12

Speedy has net income of $18,955,and assets at the beginning of the year of $200,000.Assets at the end of the year total $246,000.Compute its return on assets.

Accepted Answer

A) 7.7%. 
B) 8.5%. 
C) 9.5%. 
D) 11.8%. 
E) 13.0%. 
A) 7.7%. 
B) 8.5%. 
C) 9.5%. 
D) 11.8%. 
E) 13.0%.

Question 13

At the beginning of the period,a company had $350,000 worth of assets,$110,000 worth of liabilities,and $240,000 worth of equity.Assume the only change during the period was a $30,000 purchase of equipment by issuing a note payable.Show the accounting equation with the appropriate amounts at the end of the period.

Accepted Answer

$380,000 = $140,000 + $240,000

Question 14

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

Accepted Answer

A) An increase of $80,000. 
B) A decrease of $80,000. 
C) An increase of $30,000. 
D) A decrease of $30,000. 
E) An increase of $25,000. 
A) An increase of $80,000. 
B) A decrease of $80,000. 
C) An increase of $30,000. 
D) A decrease of $30,000. 
E) An increase of $25,000.

Question 15

Every business transaction leaves the accounting equation in balance.

Accepted Answer

A) True 
 B)False

Question 16

Explain why ethics are an integral part of accounting.

Accepted Answer

The purpose of accounting is to provide

Question 17

The statement of cash flows reports all of the following except:

Accepted Answer

A) Cash flows from operating activities. 
B) Cash flows from investing activities. 
C) Cash flows from financing activities. 
D) The net increase or decrease in assets for the period reported. 
E) The net increase or decrease in cash for the period reported. 
A) Cash flows from operating activities. 
B) Cash flows from investing activities. 
C) Cash flows from financing activities. 
D) The net increase or decrease in assets for the period reported. 
E) The net increase or decrease in cash for the period reported.

Question 18

Jet Styling has the following beginning cash balance and cash transactions for the month of January.Using this information prepare a statement of cash flows.

Accepted Answer

The answer of Jet Styling has the following beginning cash...

Question 19

At the end of its first year of operations,the records of Roadmaster Auto Rentals show the following information.$52,000 of cash dividends were paid during the year.Prepare a December income statement,a December statement of retained earnings,and a December 30 balance sheet.

Accepted Answer

The answer of At the end of its first year...

Question 20

Describe the two important guidelines for revenue recognition.

Accepted Answer

The two important guidelines for revenue

Exam 1: Accounting in Business

The description of the relation between a company's assets,liabilities,and equity,which is expressed as Assets = Liabilities + Equity,is known as the:

A parcel of land is offered for sale at $600,000,is assessed for tax purposes at $500,000,is recognized by its purchasers as easily being worth $575,000,and is sold for $570,000.At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

How does the going-concern principle affect reporting asset values of a business?

Technology:

Owners of a corporation are called shareholders or stockholders.

Billington Corp borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of stockholders' equity as of August 31 of the current year?

The Sarbanes-Oxley Act (SOX)requires documentation and verification of internal controls.It also emphasizes effective internal controls.

Assets created by selling goods and services on credit are:

From an accounting perspective,an event is a happening that affects the accounting equation,but cannot be measured.

Risk is the ________ about the return an investor expects to earn.

Speedy has net income of $18,955,and assets at the beginning of the year of $200,000.Assets at the end of the year total $246,000.Compute its return on assets.

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

Every business transaction leaves the accounting equation in balance.

Explain why ethics are an integral part of accounting.

The statement of cash flows reports all of the following except:

Jet Styling has the following beginning cash balance and cash transactions for the month of January.Using this information prepare a statement of cash flows.

At the end of its first year of operations,the records of Roadmaster Auto Rentals show the following information.$52,000 of cash dividends were paid during the year.Prepare a December income statement,a December statement of retained earnings,and a December 30 balance sheet.

Describe the two important guidelines for revenue recognition.

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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