Exam 1: Accounting in Business

The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

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

Another name for equity is:

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

Revenues are:

The accounting equation is ________.

The expense recognition principle, also called the matching principle:

In accounting, the rule that requires that assets, services, and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ________.

Assets created by selling goods and services on credit are:

Owner's investments are increases in equity from a company's earnings activities.

Owner's equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

The financial statement that shows the beginning balance of owner's equity; the changes in equity that resulted from new investments by the owner, net income (or net loss); withdrawals; and the ending balance, is the:

How does the objectivity principle support ethical behavior?

A sole proprietorship is a business owned by one or more persons.

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

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

Rent expense appears on which of the following statements?

Which of the following combinations results does not result in the same amount of net income reported on the income statement?