Question 1

Speedy has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

Accepted Answer

A)  7.7%. 
B)  13.0%. 
C)  8.5%. 
D)  9.5%. 
E)  11.8%. 
A)  7.7%. 
B)  13.0%. 
C)  8.5%. 
D)  9.5%. 
E)  11.8%.

Question 2

Classify the following activities according to the appropriate section of the statement of cash flows.
a. Operating activity
b. Investing activity
c. Financing activity
1. Cash received from a one-time sale of used office equipment.
____ 2. Cash paid for withdrawals by owners.
____ 3. Cash received from customers.
____ 4. Cash received from owner contributions.
____ 5. Cash paid for utilities.
____ 6. Cash paid for a delivery van to be used in the business.

Accepted Answer

1. B; 2. C

Question 3

There are at least three types of partnerships that limit the partners' liability. They are 1)________, 2) ________, and 3)________.

Accepted Answer

limited partnership,

Question 4

An owner's investment increases equity via net income.

Accepted Answer

A) True 
 B)False

Question 5

Cragmont has beginning equity of $277,000, net income of $63,000, withdrawals of $25,000 and no additional investments by owners during the period. Its ending equity is:

Accepted Answer

A)  $189,000. 
B)  $315,000. 
C)  $365,000. 
D)  $239,000. 
E)  $277,000. 
A)  $189,000. 
B)  $315,000. 
C)  $365,000. 
D)  $239,000. 
E)  $277,000.

Question 6

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Accepted Answer

A)  $97,000. 
B)  $38,000. 
C)  $88,000. 
D)  $47,000. 
E)  $25,000. 
A)  $97,000. 
B)  $38,000. 
C)  $88,000. 
D)  $47,000. 
E)  $25,000.

Question 7

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Accepted Answer

A)  20.0%. 
B)  6.7%. 
C)  7.1%. 
D)  18.8%. 
E)  7.5%. 
A)  20.0%. 
B)  6.7%. 
C)  7.1%. 
D)  18.8%. 
E)  7.5%.

Question 8

The primary objective of financial accounting is to:

Accepted Answer

A)  Provide accounting information that serves external users. 
B)  Serve the decision-making needs of internal users. 
C)  Monitor and control company activities. 
D)  Provide information on both the costs and benefits of looking after products and services. 
E)  Know what, when, and how much product to produce. 
A)  Provide accounting information that serves external users. 
B)  Serve the decision-making needs of internal users. 
C)  Monitor and control company activities. 
D)  Provide information on both the costs and benefits of looking after products and services. 
E)  Know what, when, and how much product to produce.

Question 9

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Accepted Answer

A) True 
 B)False

Question 10

How does the going-concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f

Question 11

The materiality constraint:

Accepted Answer

A)  Prescribes that only information that would influence the decisions of a reasonable person need be disclosed. 
B)  Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold. 
C)  Provides guidance on when a company must recognize revenue. 
D)  Prescribes that accounting information is based on actual cost. 
E)  Prescribes that a company record the expenses it incurred to generate the revenue reported. 
A)  Prescribes that only information that would influence the decisions of a reasonable person need be disclosed. 
B)  Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold. 
C)  Provides guidance on when a company must recognize revenue. 
D)  Prescribes that accounting information is based on actual cost. 
E)  Prescribes that a company record the expenses it incurred to generate the revenue reported.

Question 12

Match between columns
                        Premises:  An information and measurement system that identifies, records and communicates relevant reliable and comparable information about an organization's business activities.
 The part of accounting that involves recording transactions and events, either electronically or manually.
 Persons using accounting information who are not directly involved in running the organization.
 Persons using accounting information who are directly involved in managing and operating the organization.
 The area of accounting that serves the decision-making needs of internal users.
 The area of accounting aimed at serving external users by providing them with general-purpose financial statements.
 Accounting specialists that have met educational and experience requirements, passed an examination and exhibit ethical characteristics to achieve a professional certification.
 Beliefs that distinguish right from wrong, considered accepted standards of good and bad behavior.
 A model that asserts the factors that must exist for a person to commit fraud.

Accepted Answer

The Answer of Financial accounting and Ethics and Recordkeeping and is...

Question 13

Data for Kennedy Realty are as follows:
 $$\begin{array} {| l | l |} 
\hline\text { Total asets at January } 1 & \$ 100,000 \
\hline \text { Total liabilities at January } 1 & 35,000 \
\hline \text { Total revenues for the year } & 79,000 \
\hline \text { Total expenses for the year } & 47,000 \
\hline
\end{array}$$  The owner, Finn Kennedy, withdrew a total of $30,000 for personal use during the year. Using the above data, prepare Kennedy Realty's Statement of Owner's Equity for the year ended December 31.

Accepted Answer

KENNEDY REALTY
Statement of Owner's Equi

Question 14

If assets are $365,000 and equity is $120,000, then liabilities are:

Accepted Answer

A)  $365,000. 
B)  $245,000. 
C)  $610,000. 
D)  $120,000. 
E)  $485,000. 
A)  $365,000. 
B)  $245,000. 
C)  $610,000. 
D)  $120,000. 
E)  $485,000.

Question 15

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income.

Accepted Answer

A)  $49,000. 
B)  $64,000. 
C)  $19,000. 
D)  $30,000. 
E)  $83,000. 
A)  $49,000. 
B)  $64,000. 
C)  $19,000. 
D)  $30,000. 
E)  $83,000.

Question 16

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

Accepted Answer

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

Question 17

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

Accepted Answer

A)  $492,000. 
B)  $792,000. 
C)  $108,000. 
D)  $300,000. 
E)  $192,000. 
A)  $492,000. 
B)  $792,000. 
C)  $108,000. 
D)  $300,000. 
E)  $192,000.

Question 18

What is the balance sheet? What is its purpose?

Accepted Answer

The balance sheet is one of the four req

Question 19

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 20

U.S. Government Treasury bonds provide low return and low risk to investors.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

Speedy has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

There are at least three types of partnerships that limit the partners' liability. They are 1)________, 2) ________, and 3)________.

An owner's investment increases equity via net income.

Cragmont has beginning equity of $277,000, net income of $63,000, withdrawals of $25,000 and no additional investments by owners during the period. Its ending equity is:

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

The primary objective of financial accounting is to:

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

How does the going-concern principle affect reporting asset values of a business?

The materiality constraint:

If assets are $365,000 and equity is $120,000, then liabilities are:

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income.

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

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

What is the balance sheet? What is its purpose?

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

U.S. Government Treasury bonds provide low return and low risk to investors.

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

Filters

There are at least three types of partnerships that limit the partners' liability. They are 1), 2) , and 3).