Question 1

U.S. government bonds are:

Accepted Answer

A)  Low-risk and high-return investments. 
B)  High-risk and high-return investments. 
C)  Low-risk and low-return investments. 
D)  High risk and no-return investments. 
E)  High-risk and low-return investments. 
A)  Low-risk and high-return investments. 
B)  High-risk and high-return investments. 
C)  Low-risk and low-return investments. 
D)  High risk and no-return investments. 
E)  High-risk and low-return investments.

Question 2

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

Accepted Answer

A)  Assets decrease $1,300 and equity decreases $1,300. 
B)  Assets increase $1,300 and liabilities decrease $1,300. 
C)  Assets increase $1,300 and liabilities increase $1,300. 
D)  One asset increases $1,300 and another asset decreases $1,300, causing no effect. 
E)  Assets decrease $1,300 and equity increases $1,300. 
A)  Assets decrease $1,300 and equity decreases $1,300. 
B)  Assets increase $1,300 and liabilities decrease $1,300. 
C)  Assets increase $1,300 and liabilities increase $1,300. 
D)  One asset increases $1,300 and another asset decreases $1,300, causing no effect. 
E)  Assets decrease $1,300 and equity increases $1,300.

Question 3

A company acquires equipment for $75,000 cash. This represents a(n):

Accepted Answer

A)  Financing activity. 
B)  Revenue activity. 
C)  Expense activity. 
D)  Operating activity. 
E)  Investing activity. 
A)  Financing activity. 
B)  Revenue activity. 
C)  Expense activity. 
D)  Operating activity. 
E)  Investing activity.

Question 4

An exchange of value between two entities that yields a change in the accounting equation is called:

Accepted Answer

A)  An external transaction. 
B)  The accounting equation. 
C)  Net Income. 
D)  Recordkeeping or bookkeeping. 
E)  An asset. 
A)  An external transaction. 
B)  The accounting equation. 
C)  Net Income. 
D)  Recordkeeping or bookkeeping. 
E)  An asset.

Question 5

The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

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

Question 7

Prepare a April 30 balance sheet in proper form for Two Rivers Vending Service from the following alphabetical list of the accounts at April 30:
 $\begin{array}{llr}
  \text { Accounts recervable. } &\$10,000\
 \text { Accounts payable. } &18,000\
 \text { Building } &28,000\
 \text { Cash } &10,000\
 \text { Notes payable } &47,000\
 \text {  Office equipment.} &12,000\
 \text { K. Fields, Capital. } &?\
 \text {Trucks.  } &55,000
\end{array}$

Accepted Answer

The answer of Prepare a April 30 balance sheet in...

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by the purchaser as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at:

Accepted Answer

A)  $140,000. 
B)  $137,000. 
C)  $150,000. 
D)  $138,500. 
E)  $95,000. 
A)  $140,000. 
B)  $137,000. 
C)  $150,000. 
D)  $138,500. 
E)  $95,000.

Question 10

Revenue is properly recognized:

Accepted Answer

A)  Only if the transaction creates an account receivable. 
B)  At the end of the accounting period. 
C)  When the customer makes an order. 
D)  Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price. 
E)  When cash from a sale is received. 
A)  Only if the transaction creates an account receivable. 
B)  At the end of the accounting period. 
C)  When the customer makes an order. 
D)  Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price. 
E)  When cash from a sale is received.

Question 11

Prepare a December 31 balance sheet in proper form for Cane Property Management using the following accounts and amounts:
 $\begin{array}{ll}
\text { Accounts payable }&\$40,000 \
 \text { ccounts receivable }&3,500 \
 \text {Accounts receivable}&5,000\
 \text { M. Bruno, Capital }&104,500\
 \text {Office equipment.}&10,000\
 \text {Advertising expense}&3,200\
 \text {Cash}&7,500\
 \text {Land}&35,000\
&132
\end{array}$ $\begin{array}{llr}
  \text { Note payable. } &50,000\
 \text { Office supplies. } &1,500\
 \text {  Salaries expense.} &12,000\
 \text { Salaries payable. } &1,000\
 \text { Building. } &100,000\
\end{array}$

Accepted Answer

CANE PROPERTY MANAGE

Question 12

The characteristics below apply to at least one of the forms of business organization.
a. Is a separate legal entity.
b. Is allowed to be owned by one person only.
c. Owner or owners are personally liable for debts of the business.
d. Is a separately taxable entity.
e. Is a business entity.
f. May have a contract specifying the division of profits among the owners.
g. Has an unlimited life
Use the following format to indicate (with a "yes" or "no") whether or not a characteristic applies to each type of business organization.
 $$\begin{array} { | l | l | l | l } 
\hline & \text { Proprietor ship } & \text { Partnership } & \text { Corporation } \
\hline \text { a. } & & & \
\hline \text { b. } & & & \
\hline \text { c. } & & & \
\hline \text { d. } & & & \
\hline \text { e. } & & & \
\hline \text { f. } & & & \
\hline \text { g. } & & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | c | c | c | } 
\

Question 13

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 14

An example of an operating activity is:

Accepted Answer

A)  Purchasing office equipment. 
B)  Selling stock. 
C)  Paying wages. 
D)  Paying off a loan. 
E)  Borrowing money from a bank. 
A)  Purchasing office equipment. 
B)  Selling stock. 
C)  Paying wages. 
D)  Paying off a loan. 
E)  Borrowing money from a bank.

Question 15

Explain why ethics are an integral part of accounting.

Accepted Answer

The purpose of accounting is to provide

Question 16

The three common forms of business ownership include sole proprietorship, partnership, and non-profit.

Accepted Answer

A) True 
 B)False

Question 17

The assumption that requires that a business be accounted for separately from its owners is the
________ assumption.

Accepted Answer

The answer of The assumption that requires that a business...

Question 18

Which of the following accounts is not included in the calculation of a company's ending owner's equity?

Accepted Answer

A)  Cash. 
B)  Revenues. 
C)  Expenses. 
D)  Owner investments. 
E)  Withdrawals. 
A)  Cash. 
B)  Revenues. 
C)  Expenses. 
D)  Owner investments. 
E)  Withdrawals.

Question 19

________ is net income divided by average total assets.

Accepted Answer

The answer of ________ is net income divided by average...

Question 20

________ users of accounting information are not directly involved in running the organization.

Accepted Answer

The answer of ________ users of accounting information are not...

Exam 1: Accounting in Business

U.S. government bonds are:

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

A company acquires equipment for $75,000 cash. This represents a(n):

An exchange of value between two entities that yields a change in the accounting equation is called:

The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.

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

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

Revenue is properly recognized:

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

An example of an operating activity is:

Explain why ethics are an integral part of accounting.

The three common forms of business ownership include sole proprietorship, partnership, and non-profit.

The assumption that requires that a business be accounted for separately from its owners is the ________ assumption.

Which of the following accounts is not included in the calculation of a company's ending owner's equity?

________ is net income divided by average total assets.

________ users of accounting information are not directly involved in running the organization.

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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