Question 1

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

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 2

Accounting is an information and measurement system that does all of the following except:

Accepted Answer

A)  Identifies business activities. 
B)  Records business activities. 
C)  Communicates business activities. 
D)  Eliminates the need for interpreting financial data. 
E)  Helps people make better decisions. 
A)  Identifies business activities. 
B)  Records business activities. 
C)  Communicates business activities. 
D)  Eliminates the need for interpreting financial data. 
E)  Helps people make better decisions.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The following schedule reflects shows the first month's transactions of the Green Construction Company; Jennifer Green is its sole stockholder:   
Provide descriptions for each transaction.

Accepted Answer

1.Investment of cash in business by stoc

Question 5

The accounting concept that requires every business to be accounted for separately from other business entities,including its owner or owners is known as the:

Accepted Answer

A)  Time-period assumption. 
B)  Business entity assumption. 
C)  Going-concern assumption. 
D)  Revenue recognition principle. 
E)  Measurement (Cost) principle. 
A)  Time-period assumption. 
B)  Business entity assumption. 
C)  Going-concern assumption. 
D)  Revenue recognition principle. 
E)  Measurement (Cost) principle.

Question 6

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Accepted Answer

A)  APB. 
B)  FASB. 
C)  AAA. 
D)  AICPA. 
E)  SEC. 
A)  APB. 
B)  FASB. 
C)  AAA. 
D)  AICPA. 
E)  SEC.

Question 7

All of the following are classified as assets except:

Accepted Answer

A)  Accounts Payable. 
B)  Accounts Receivable. 
C)  Cash. 
D)  Supplies. 
E)  Prepaid Insurance. 
A)  Accounts Payable. 
B)  Accounts Receivable. 
C)  Cash. 
D)  Supplies. 
E)  Prepaid Insurance.

Question 8

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.
 a.$\begin{array}{lr}
\text { Beginning cash balance ................... } & \$ 3,200 \\end{array}$
b.$\begin{array}{lr}\text { Cash received from stock issuance.... } & 15,000 \\end{array}$
c.$\begin{array}{lr}\text { Cash payment toward long-term loan } & 1,000 \\end{array}$
d.$\begin{array}{lr}\text { Cash payment of rent ....................... } & 1,800 \\end{array}$
e.$\begin{array}{lr}\text { Purchased equipment for cash .......... } & 7,500 \\end{array}$
f.$\begin{array}{lr}\text { Purchased store supplies for cash ...... } & 1,500 \\end{array}$
g.$\begin{array}{lr}\text { Cash collected from customers ......... } & 7,750 \\end{array}$
h.$\begin{array}{lr}\text { Cash dividends paid ......................... } & 2,000 \\end{array}$
i.$\begin{array}{lr}\text { Cash payment of wages .................... } & 4,000
\end{array}$

Accepted Answer

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

Question 9

The accounting equation implies that: Assets + Liabilities = Equity.

Accepted Answer

A) True 
 B)False

Question 10

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:

Accepted Answer

A)  Accounting equation. 
B)  Measurement (Cost) principle. 
C)  Going-concern assumption. 
D)  Realization principle. 
E)  Business entity assumption. 
A)  Accounting equation. 
B)  Measurement (Cost) principle. 
C)  Going-concern assumption. 
D)  Realization principle. 
E)  Business entity assumption.

Question 11

Match the following terms with the appropriate definition.
-Balance sheet

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 12

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

Accepted Answer

A) The principle that assumes transactions and events can be expressed in money units. 
B) The cost of assets or services used to earn revenue. 
C) The principle that requires a business to be accounted for separately from its owners. 
D) Describes a company's revenues and expenses along with the resulting net income or loss over a period of time. 
E) Creditor's claims on assets.
F)The relation between a company's assets, liabilities, and equity.
G)The principle that revenue is recorded when earned through providing goods or services.
H)A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing, and financing activities.
I)Happenings, such as changes in market value, that effect the accounting equation and are reliably measured. 
A) The principle that assumes transactions and events can be expressed in money units. 
B) The cost of assets or services used to earn revenue. 
C) The principle that requires a business to be accounted for separately from its owners. 
D) Describes a company's revenues and expenses along with the resulting net income or loss over a period of time. 
E) Creditor's claims on assets.
F)The relation between a company's assets, liabilities, and equity.
G)The principle that revenue is recorded when earned through providing goods or services.
H)A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing, and financing activities.
I)Happenings, such as changes in market value, that effect the accounting equation and are reliably measured.

Question 13

Match each of the following terms with the most appropriate definition.
-Reflects outflows of resources such as cash and other assets to stockholders.

Accepted Answer

A) Assets 
B) Expenses 
C) Return on assets 
D) Accounting equation 
E) Risk
F)Common stock
G)Dividends
H)Liabilities 
A) Assets 
B) Expenses 
C) Return on assets 
D) Accounting equation 
E) Risk
F)Common stock
G)Dividends
H)Liabilities

Question 14

You are reviewing the accounting records of Buddy's Foreign Automotive,owned by Bruce Jones,its sole stockholder.You have uncovered the following situations.List the appropriate accounting principle related to each independent scenario and suggest a correct action for each .
1.In August,a check for $500 was written to Community Sports.This amount represents soccer camp for his daughter Cassie.
2.Bruce plans a Going Out of Business Sale for June,since he will be closing the business for a month-long vacation in July.He plans to reopen August 1 and will continue operating Buddy's Foreign Automotive indefinitely.
3.Buddy received a shipment of tools from Ontario,Canada.The invoice was stated in Canadian dollars.
4.Sandy Lane paid $1,500 for a major repair services.The amount was recorded as revenue.The parts for the repair must be ordered from overseas and the service won't be complete until the following month.

Accepted Answer

1.Business entity assumption.Buddy shoul

Question 15

If Houston Company billed a client for $10,000 of consulting work completed,the accounts receivable asset increases by $10,000 and:

Accepted Answer

A)  Accounts payable decreases $10,000. 
B)  Accounts payable increases $10,000. 
C)  Cash increases $10,000. 
D)  Revenue increases $10,000. 
E)  Revenue decreases $10,000. 
A)  Accounts payable decreases $10,000. 
B)  Accounts payable increases $10,000. 
C)  Cash increases $10,000. 
D)  Revenue increases $10,000. 
E)  Revenue decreases $10,000.

Question 16

Ethical behavior requires that:

Accepted Answer

A)  Auditors' pay not depend on the success of the client's business. 
B)  Auditors invest in businesses they audit. 
C)  Analysts report information favorable to their companies. 
D)  Managers use accounting information to benefit themselves. 
E)  Auditors' pay depends on the success of the client's business. 
A)  Auditors' pay not depend on the success of the client's business. 
B)  Auditors invest in businesses they audit. 
C)  Analysts report information favorable to their companies. 
D)  Managers use accounting information to benefit themselves. 
E)  Auditors' pay depends on the success of the client's business.

Question 17

All of the following are classified as liabilities except:

Accepted Answer

A)  Accounts Receivable. 
B)  Notes Payable. 
C)  Wages Payable. 
D)  Accounts Payable. 
E)  Taxes Payable. 
A)  Accounts Receivable. 
B)  Notes Payable. 
C)  Wages Payable. 
D)  Accounts Payable. 
E)  Taxes Payable.

Question 18

If a company has excess space in its building that it rents to another company for $700,what is the effect on the accounting equation during the first month?

Accepted Answer

A)  Assets would decrease $700 and liabilities would decrease $700. 
B)  Assets would decrease $700 and equity would increase $700. 
C)  Assets would increase $700 and equity would decrease $700. 
D)  Assets would increase $700 and equity would increase $700. 
E)  Liabilities would decrease $700 and equity would increase $700. 
A)  Assets would decrease $700 and liabilities would decrease $700. 
B)  Assets would decrease $700 and equity would increase $700. 
C)  Assets would increase $700 and equity would decrease $700. 
D)  Assets would increase $700 and equity would increase $700. 
E)  Liabilities would decrease $700 and equity would increase $700.

Question 19

As a general rule,revenues should not be recognized in the accounting records when earned,but rather when cash is received.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

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

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Accounting is an information and measurement system that does all of the following except:

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

The following schedule reflects shows the first month's transactions of the Green Construction Company; Jennifer Green is its sole stockholder: Provide descriptions for each transaction.

The accounting concept that requires every business to be accounted for separately from other business entities,including its owner or owners is known as the:

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

All of the following are classified as assets except:

The accounting equation implies that: Assets + Liabilities = Equity.

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:

Match the following terms with the appropriate definition. -Balance sheet

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

Match each of the following terms with the most appropriate definition. -Reflects outflows of resources such as cash and other assets to stockholders.

If Houston Company billed a client for $10,000 of consulting work completed,the accounts receivable asset increases by $10,000 and:

Ethical behavior requires that:

All of the following are classified as liabilities except:

If a company has excess space in its building that it rents to another company for $700,what is the effect on the accounting equation during the first month?

As a general rule,revenues should not be recognized in the accounting records when earned,but rather when cash is received.

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

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

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Accounting is an information and measurement system that does all of the following except:

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

The following schedule reflects shows the first month's transactions of the Green Construction Company; Jennifer Green is its sole stockholder: Provide descriptions for each transaction.

The accounting concept that requires every business to be accounted for separately from other business entities,including its owner or owners is known as the:

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

All of the following are classified as assets except:

The accounting equation implies that: Assets + Liabilities = Equity.

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:

Match the following terms with the appropriate definition. -Balance sheet

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

Match each of the following terms with the most appropriate definition. -Reflects outflows of resources such as cash and other assets to stockholders.

If Houston Company billed a client for $10,000 of consulting work completed,the accounts receivable asset increases by $10,000 and:

Ethical behavior requires that:

All of the following are classified as liabilities except:

If a company has excess space in its building that it rents to another company for $700,what is the effect on the accounting equation during the first month?

As a general rule,revenues should not be recognized in the accounting records when earned,but rather when cash is received.

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

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