Question 1

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Accepted Answer

A) True 
 B)False

Question 2

The International Accounting Standards Board (IASB):

Accepted Answer

A)  Hopes to create harmony among accounting practices of different countries to improve comparability. 
B)  Is the government group that establishes reporting requirements for companies that issue stock to the investing public. 
C)  Has the authority to impose its standards on companies around the world. 
D)  Is the only source of generally accepted accounting principles (GAAP). 
E)  Only applies to companies that are members of the European Union. 
A)  Hopes to create harmony among accounting practices of different countries to improve comparability. 
B)  Is the government group that establishes reporting requirements for companies that issue stock to the investing public. 
C)  Has the authority to impose its standards on companies around the world. 
D)  Is the only source of generally accepted accounting principles (GAAP). 
E)  Only applies to companies that are members of the European Union.

Question 3

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

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 4

The accounts of Odie Company with the increases or decreases that occurred during the past year are as follows:
 $$\begin{array} { l l l } 
\text { Account } & \text { Increase } & \text { Decrease } \
\text { Cash } & \$ 25,000 & \
\text { Accounts receivable } & & \$ ( 5,000 ) \
\text { Accounts payable } & & ( 11,000 ) \
\text { Notes payable } & 16,000 &
\end{array}$$ 
Except for net income,an investment of $3,000 by its sole stockholder in exchange for common stock,and a dividend of $11,000 to its stockholder,no other items affected equity.Using the balance sheet equation,compute net income for the past year.

Accepted Answer

The answer of The accounts of Odie Company with the...

Question 5

Creditors' claims on the assets of a company are called:

Accepted Answer

A)  Net losses. 
B)  Expenses. 
C)  Revenues. 
D)  Equity. 
E)  Liabilities. 
A)  Net losses. 
B)  Expenses. 
C)  Revenues. 
D)  Equity. 
E)  Liabilities.

Question 6

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Accepted Answer

A) True 
 B)False

Question 7

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following accounts is not included in the asset section of the balance sheet?

Accepted Answer

A)  Buildings. 
B)  Wages expense. 
C)  Supplies. 
D)  Land. 
E)  Furniture. 
A)  Buildings. 
B)  Wages expense. 
C)  Supplies. 
D)  Land. 
E)  Furniture.

Question 9

________ explains changes in the stockholders' claim on the business's assets from net income or loss,and dividends over a period of time.

Accepted Answer

The statem

Question 10

The following is a list of selected users of accounting information. Match the appropriate user to the following decisions they make with accounting information.
-Know what,when,and how much to purchase.

Accepted Answer

A) Purchasing Managers 
B) Lenders 
C) Suppliers 
D) Regulators 
E) Shareholders 
A) Purchasing Managers 
B) Lenders 
C) Suppliers 
D) Regulators 
E) Shareholders

Question 11

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 12

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 13

Verity Siding Company,whose sole stockholder is S.Verity,began operations in May and completed the following transactions during that first month of operations.Show the effects of the transactions on the accounts of the accounting equation by recording increases and decreases in the appropriate columns in the table below.Do not determine new account balances after each transaction.Determine the final total for each account and verify that the equation is in balance.

Accepted Answer

The answer of Verity Siding Company,whose sole stockholder is S.Verity,began...

Question 14

Risk is the uncertainty about the return we will earn.

Accepted Answer

A) True 
 B)False

Question 15

Financial accounting is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

Accepted Answer

A) True 
 B)False

Question 16

The expense recognition principle,also called the matching 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 17

Decreases in equity that represent costs of providing products or services to customers,used to earn revenues are called:

Accepted Answer

A)  Liabilities. 
B)  Equity. 
C)  Dividends. 
D)  Expenses. 
E)  Common Stock. 
A)  Liabilities. 
B)  Equity. 
C)  Dividends. 
D)  Expenses. 
E)  Common Stock.

Question 18

Zippy had cash inflows from operations $60,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was:

Accepted Answer

A)  $38,500 increase. 
B)  $38,500 decrease. 
C)  $132,500 decrease. 
D)  $132,000 increase. 
E)  $11,500 decrease. 
A)  $38,500 increase. 
B)  $38,500 decrease. 
C)  $132,500 decrease. 
D)  $132,000 increase. 
E)  $11,500 decrease.

Question 19

Generally accepted accounting principles are the basic assumptions,concepts,and guidelines for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 20

Increases in equity from a company's sales of products or services 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.

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

The International Accounting Standards Board (IASB):

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

Creditors' claims on the assets of a company are called:

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Which of the following accounts is not included in the asset section of the balance sheet?

________ explains changes in the stockholders' claim on the business's assets from net income or loss,and dividends over a period of time.

The following is a list of selected users of accounting information. Match the appropriate user to the following decisions they make with accounting information. -Know what,when,and how much to purchase.

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?

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.

Risk is the uncertainty about the return we will earn.

Financial accounting is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

The expense recognition principle,also called the matching principle:

Decreases in equity that represent costs of providing products or services to customers,used to earn revenues are called:

Zippy had cash inflows from operations $60,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was:

Generally accepted accounting principles are the basic assumptions,concepts,and guidelines for preparing financial statements.

Increases in equity from a company's sales of products or services are:

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

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

The International Accounting Standards Board (IASB):

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

Creditors' claims on the assets of a company are called:

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Which of the following accounts is not included in the asset section of the balance sheet?

________ explains changes in the stockholders' claim on the business's assets from net income or loss,and dividends over a period of time.

The following is a list of selected users of accounting information. Match the appropriate user to the following decisions they make with accounting information. -Know what,when,and how much to purchase.

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?

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.

Risk is the uncertainty about the return we will earn.

Financial accounting is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

The expense recognition principle,also called the matching principle:

Decreases in equity that represent costs of providing products or services to customers,used to earn revenues are called:

Zippy had cash inflows from operations $60,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was:

Generally accepted accounting principles are the basic assumptions,concepts,and guidelines for preparing financial statements.

Increases in equity from a company's sales of products or services are:

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