Question 1

Every business transaction leaves the accounting equation in balance.

Accepted Answer

A) True 
 B)False

Question 2

Planning is a part of each business activity (Operating, investing, and financing), and gives each activity meaning and focus.

Accepted Answer

A) True 
 B)False

Question 3

The accounting concept that requires financial statement information to be supported by independent, unbiased evidence is:

Accepted Answer

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

Question 4

A partnership is a business owned by two or more people.

Accepted Answer

A) True 
 B)False

Question 5

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Accepted Answer

A) True 
 B)False

Question 6

The ________ principle requires that financial information is supported by independent, unbiased evidence.

Accepted Answer

The answer of The ________ principle requires that financial information...

Question 7

Match between columns
                        Premises:  Know what, when, and how much to purchase.
 Judge the soundness of a customer before making sales on credit.
 Assess whether a company has paid all required taxes and complied with securities rules.
 Assess whether an organization is likely to repay its loans with interest.
 Decide whether to buy, hold, or sell a company's stock.

Accepted Answer

The Answer of Suppliers and Lenders and Shareholders and Purchasing is...

Question 8

Which of the following accounts is not included in the calculation of net income?

Accepted Answer

A)  Rent expense. 
B)  Cash. 
C)  Rent revenue. 
D)  Services revenue. 
E)  Wages expense. 
A)  Rent expense. 
B)  Cash. 
C)  Rent revenue. 
D)  Services revenue. 
E)  Wages expense.

Question 9

An accounting system captures relevant data about transactions and then classifies, records, and reports data.

Accepted Answer

A) True 
 B)False

Question 10

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Accepted Answer

The income statement describes a company

Question 11

The going concern assumption:

Accepted Answer

A)  Means that we can express transactions and events in monetary, or money, units. 
B)  Means that a business is accounted for separately from other business entities, including its owner. 
C)  Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods. 
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)  Means that we can express transactions and events in monetary, or money, units. 
B)  Means that a business is accounted for separately from other business entities, including its owner. 
C)  Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods. 
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 12

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

Accepted Answer

A)  Objectivity principle. 
B)  Monetary unit assumption. 
C)  Business entity assumption. 
D)  Going-concern assumption. 
E)  Measurement (Cost) Principle. 
A)  Objectivity principle. 
B)  Monetary unit assumption. 
C)  Business entity assumption. 
D)  Going-concern assumption. 
E)  Measurement (Cost) Principle.

Question 13

The conceptual framework that the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are attempting to converge and enhance includes the following broad areas to guide standard setting except:

Accepted Answer

A)  Uniformity 
B)  Recognition and measurement 
C)  Objectives 
D)  Qualitative characteristics 
E)  Elements 
A)  Uniformity 
B)  Recognition and measurement 
C)  Objectives 
D)  Qualitative characteristics 
E)  Elements

Question 14

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

Accepted Answer

The Financial Accounting Standards Board

Question 15

Which of the following combinations results in a net loss reported on the income statement?

Accepted Answer

A)  Total revenues of $70,000 and total expenses of $74,000. 
B)  Total revenues of $80,000 and total expenses of $74,000. 
C)  Total revenues of $40,000 and total expenses of $31,000. 
D)  Total revenues of $20,000 and total expenses of $16,000. 
E)  Total revenues of $60,000 and total expenses of $52,000. 
A)  Total revenues of $70,000 and total expenses of $74,000. 
B)  Total revenues of $80,000 and total expenses of $74,000. 
C)  Total revenues of $40,000 and total expenses of $31,000. 
D)  Total revenues of $20,000 and total expenses of $16,000. 
E)  Total revenues of $60,000 and total expenses of $52,000.

Question 16

Match between columns
                        Premises:  The uncertainty about the return to be earned.
 Resources such as cash that an owner puts into the company.
 A financial ratio stated as income divided by assets invested.
 Creditor's claims on a company's assets.
 Decreases in equity from costs of providing products or services to customers.
 Resources such as cash that an owner takes from the company for personal use.
Resources a company owns or controls that are expected to yield future benefit.
 Expresses the relation of assets, liabilities and equity in a company, comparing the resources the company owns to the sources of funds to acquire the resources.

Accepted Answer

The Answer of Return on assets and Assets and Expenses is...

Question 17

A resource that the owner takes from the company is called a(n):

Accepted Answer

A)  Investment. 
B)  Liability. 
C)  Contribution. 
D)  Withdrawal. 
E)  Expense. 
A)  Investment. 
B)  Liability. 
C)  Contribution. 
D)  Withdrawal. 
E)  Expense.

Question 18

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

Question 19

Identify the three basic forms of business organizations and their key attributes.

Accepted Answer

The three basic forms of business organi

Question 20

The accounts of Odie Company with the increases or decreases that occurred during the past year are as follows:
 $$\begin{array} { l c c } 
\text { Account } & \text { Increase } & \text { Decrease } \
\hline \text { Cash } & \$ 25,000 & \
\text { Accounts receivable } & & \$ ( 5,000 ) \
\text { Accounts payable } & & ( 11,000 ) \
\text { Notes payable } & 16,000 &
\end{array}$$ Except for net income, an investment of $3,000 by the owner, and a withdrawal of $11,000 by the owner, no other items affected owner's 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...

Exam 1: Accounting in Business

Every business transaction leaves the accounting equation in balance.

Planning is a part of each business activity (Operating, investing, and financing), and gives each activity meaning and focus.

The accounting concept that requires financial statement information to be supported by independent, unbiased evidence is:

A partnership is a business owned by two or more people.

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

The ________ principle requires that financial information is supported by independent, unbiased evidence.

Which of the following accounts is not included in the calculation of net income?

An accounting system captures relevant data about transactions and then classifies, records, and reports data.

Describe the income statement and the relation between revenues, expenses, and net income or loss.

The going concern assumption:

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

The conceptual framework that the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are attempting to converge and enhance includes the following broad areas to guide standard setting except:

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

Which of the following combinations results in a net loss reported on the income statement?

A resource that the owner takes from the company is called a(n):

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

Identify the three basic forms of business organizations and their key attributes.

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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