Question 1

According to the measurement (cost)principle,it is necessary for managers to report an approximation of an asset's market value upon purchase.

Accepted Answer

A) True 
 B)False  False

Question 2

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Accepted Answer

A) True 
 B)False  True

Question 3

Resources a company owns or controls that are expected to yield future benefits are:

Accepted Answer

A)  Assets. 
B)  Revenues. 
C)  Liabilities. 
D)  Stockholders' Equity. 
E)  Expenses. 
A)  Assets. 
B)  Revenues. 
C)  Liabilities. 
D)  Stockholders' Equity. 
E)  Expenses. A

Question 4

Use the following information as of December 31 to determine equity.
$$\begin{array} { l c } 
\text { Cash } & \$ 57,000 \
\text { Building } & 175,000 \
\text { Equipment } & 206,000 \
\text { Liabilities } & 141,000
\end{array}$$

Accepted Answer

A)  $57,000. 
B)  $141,000. 
C)  $297,000. 
D)  $438,000. 
E)  $579,000. 
A)  $57,000. 
B)  $141,000. 
C)  $297,000. 
D)  $438,000. 
E)  $579,000.

Question 5

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Accepted Answer

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

Question 6

Match the following terms with the appropriate definition.
-Measurement (Cost)principle

Accepted Answer

A) The governmental agency that has the legal authority to establish accounting rules. 
B) Prescribes that assets and services to be recorded initially on a cash or equal-to-cash basis. 
C) A report that describes a company's financial position at a point in time. 
D) A financial statement that reports the changes in equity over the reporting period; including increases from net income and decreases from dividends or net losses. 
E) The concepts and rules that govern financial accounting.
F)A report that identifies cash receipts and cash payments over a period of time.
G)A principle that requires the information in financial statements to be supported by independent unbiased evidence.
H)An independent group consisting of individuals from many countries that identify preferred accounting practices.
I)Presumes that the life of a company can be divided into periods for reporting purposes.
J)Prescribes that a company report the details behind financial statements that would impact user decisions. 
A) The governmental agency that has the legal authority to establish accounting rules. 
B) Prescribes that assets and services to be recorded initially on a cash or equal-to-cash basis. 
C) A report that describes a company's financial position at a point in time. 
D) A financial statement that reports the changes in equity over the reporting period; including increases from net income and decreases from dividends or net losses. 
E) The concepts and rules that govern financial accounting.
F)A report that identifies cash receipts and cash payments over a period of time.
G)A principle that requires the information in financial statements to be supported by independent unbiased evidence.
H)An independent group consisting of individuals from many countries that identify preferred accounting practices.
I)Presumes that the life of a company can be divided into periods for reporting purposes.
J)Prescribes that a company report the details behind financial statements that would impact user decisions.

Question 7

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

Accepted Answer

A) True 
 B)False

Question 8

A stockholder's investment increases equity via net income.

Accepted Answer

A) True 
 B)False

Question 9

There are three major types of business activities.________ activities are the means organizations use to pay for resources such as land,building,and equipment to carry out plans.

Accepted Answer

The answer of There are three major types of business...

Question 10

The materiality constraint looks at both the importance and relative size of an amount.

Accepted Answer

A) True 
 B)False

Question 11

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

Accepted Answer

The Financial Accounting Standards Board

Question 12

If a company purchases equipment costing $4,500 on credit,the effect on the accounting equation would be:

Accepted Answer

A)  Assets increase $4,500 and liabilities decrease $4,500. 
B)  Equity decreases $4,500 and liabilities increase $4,500. 
C)  Liabilities decrease $4,500 and assets increase $4,500. 
D)  Assets increase $4,500 and liabilities increase $4,500. 
E)  Equity increases $4,500 and liabilities decrease $4,500. 
A)  Assets increase $4,500 and liabilities decrease $4,500. 
B)  Equity decreases $4,500 and liabilities increase $4,500. 
C)  Liabilities decrease $4,500 and assets increase $4,500. 
D)  Assets increase $4,500 and liabilities increase $4,500. 
E)  Equity increases $4,500 and liabilities decrease $4,500.

Question 13

Match the following terms with the appropriate definition.
-Statement of cash flows

Accepted Answer

A) The governmental agency that has the legal authority to establish accounting rules. 
B) Prescribes that assets and services to be recorded initially on a cash or equal-to-cash basis. 
C) A report that describes a company's financial position at a point in time. 
D) A financial statement that reports the changes in equity over the reporting period; including increases from net income and decreases from dividends or net losses. 
E) The concepts and rules that govern financial accounting.
F)A report that identifies cash receipts and cash payments over a period of time.
G)A principle that requires the information in financial statements to be supported by independent unbiased evidence.
H)An independent group consisting of individuals from many countries that identify preferred accounting practices.
I)Presumes that the life of a company can be divided into periods for reporting purposes.
J)Prescribes that a company report the details behind financial statements that would impact user decisions. 
A) The governmental agency that has the legal authority to establish accounting rules. 
B) Prescribes that assets and services to be recorded initially on a cash or equal-to-cash basis. 
C) A report that describes a company's financial position at a point in time. 
D) A financial statement that reports the changes in equity over the reporting period; including increases from net income and decreases from dividends or net losses. 
E) The concepts and rules that govern financial accounting.
F)A report that identifies cash receipts and cash payments over a period of time.
G)A principle that requires the information in financial statements to be supported by independent unbiased evidence.
H)An independent group consisting of individuals from many countries that identify preferred accounting practices.
I)Presumes that the life of a company can be divided into periods for reporting purposes.
J)Prescribes that a company report the details behind financial statements that would impact user decisions.

Question 14

An income statement reports on investing and financing activities.

Accepted Answer

A) True 
 B)False

Question 15

Explain the role of accounting in the information age.

Accepted Answer

Accounting is an information and measure

Question 16

The cost-benefit constraint prescribes that only information with benefits of disclosure greater than the costs of providing it need be disclosed.

Accepted Answer

A) True 
 B)False

Question 17

Internal operating activities include research and development,distribution,and human resources.

Accepted Answer

A) True 
 B)False

Question 18

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Accepted Answer

A)  Increased $22,000. 
B)  Decreased $22,000. 
C)  Increased $89,000. 
D)  Decreased $156,000. 
E)  Increased $156,000. 
A)  Increased $22,000. 
B)  Decreased $22,000. 
C)  Increased $89,000. 
D)  Decreased $156,000. 
E)  Increased $156,000.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

________ is net income divided by average total assets.

Accepted Answer

The answer of ________ is net income divided by average...

According to the measurement (cost)principle,it is necessary for managers to report an approximation of an asset's market value upon purchase.

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Resources a company owns or controls that are expected to yield future benefits are:

Use the following information as of December 31 to determine equity. Cash \ 57,000 Building 175,000 Equipment 206,000 Liabilities 141,000

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Match the following terms with the appropriate definition. -Measurement (Cost)principle

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

A stockholder's investment increases equity via net income.

There are three major types of business activities.________ activities are the means organizations use to pay for resources such as land,building,and equipment to carry out plans.

The materiality constraint looks at both the importance and relative size of an amount.

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

If a company purchases equipment costing $4,500 on credit,the effect on the accounting equation would be:

Match the following terms with the appropriate definition. -Statement of cash flows

An income statement reports on investing and financing activities.

Explain the role of accounting in the information age.

The cost-benefit constraint prescribes that only information with benefits of disclosure greater than the costs of providing it need be disclosed.

Internal operating activities include research and development,distribution,and human resources.

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

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

________ is net income divided by average total assets.

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 1: Accounting in Business

According to the measurement (cost)principle,it is necessary for managers to report an approximation of an asset's market value upon purchase.

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Resources a company owns or controls that are expected to yield future benefits are:

Use the following information as of December 31 to determine equity. Cash \ 57,000 Building 175,000 Equipment 206,000 Liabilities 141,000

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Match the following terms with the appropriate definition. -Measurement (Cost)principle

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

A stockholder's investment increases equity via net income.

There are three major types of business activities.________ activities are the means organizations use to pay for resources such as land,building,and equipment to carry out plans.

The materiality constraint looks at both the importance and relative size of an amount.

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

If a company purchases equipment costing $4,500 on credit,the effect on the accounting equation would be:

Match the following terms with the appropriate definition. -Statement of cash flows

An income statement reports on investing and financing activities.

Explain the role of accounting in the information age.

The cost-benefit constraint prescribes that only information with benefits of disclosure greater than the costs of providing it need be disclosed.

Internal operating activities include research and development,distribution,and human resources.

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

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

________ is net income divided by average total assets.

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters