Question 1

The rights of owners in a corporation are referred to as

Accepted Answer

A)  proprietor's equity 
B)  stockholder's equity 
C)  dividends 
D)  equity in assets 
A)  proprietor's equity 
B)  stockholder's equity 
C)  dividends 
D)  equity in assets B

Question 2

The natural business year is a

Accepted Answer

A)  fiscal year that ends when business activities are at their lowest point 
B)  calendar year that ends when business activities are at their lowest point 
C)  fiscal year that ends when business activities are at their highest point 
D)  calendar year that ends when business activities are at their highest point 
A)  fiscal year that ends when business activities are at their lowest point 
B)  calendar year that ends when business activities are at their lowest point 
C)  fiscal year that ends when business activities are at their highest point 
D)  calendar year that ends when business activities are at their highest point A

Question 3

The monetary unit assumption

Accepted Answer

A)  is only used in the financial statements of manufacturing companies 
B)  is not important when applying the cost principle 
C)  requires that different units be used for assets and liabilities 
D)  requires that economic data be reported in yen in Japan or dollars in the United States 
A)  is only used in the financial statements of manufacturing companies 
B)  is not important when applying the cost principle 
C)  requires that different units be used for assets and liabilities 
D)  requires that economic data be reported in yen in Japan or dollars in the United States D

Question 4

The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of stockholders.

Accepted Answer

A) True 
 B)False

Question 5

If the liabilities owed by a business total $300,000 and stockholders' equity is equal to $300,000, then the assets also total $300,000.

Accepted Answer

A) True 
 B)False

Question 6

Krammer Company has liabilities equal to one fourth of the total assets. Krammer's stockholders' equity is $45,000. Using the accounting equation, what is the amount of liabilities for Krammer?

Accepted Answer

Assets = Liabilities + Stockho

Question 7

Many countries outside the United States use financial accounting standards issued by the

Accepted Answer

A)  AICPA 
B)  SEC 
C)  IASB 
D)  FASB 
A)  AICPA 
B)  SEC 
C)  IASB 
D)  FASB

Question 8

The majority of businesses end their fiscal year on December 31.

Accepted Answer

A) True 
 B)False

Question 9

Explain the interrelationship between the balance sheet and the statement of cash flows.

Accepted Answer

The cash reported on the balan

Question 10

A fiscal year for a business

Accepted Answer

A)  ordinarily begins on the first day of a month and ends on the last day of the following twelfth month 
B)  is determined by the federal government 
C)  always begins on January 1 and ends on December 31 of the same year 
D)  should end at the height of the business's annual operating cycle 
A)  ordinarily begins on the first day of a month and ends on the last day of the following twelfth month 
B)  is determined by the federal government 
C)  always begins on January 1 and ends on December 31 of the same year 
D)  should end at the height of the business's annual operating cycle

Question 11

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

Accepted Answer

A)  increase an asset, decrease another asset 
B)  decrease an asset, decrease a liability 
C)  increase an asset, increase a liability 
D)  increase an asset, increase stockholders' equity 
A)  increase an asset, decrease another asset 
B)  decrease an asset, decrease a liability 
C)  increase an asset, increase a liability 
D)  increase an asset, increase stockholders' equity

Question 12

Bob Johnson is the sole owner of Johnson's Carpet Cleaning Service. Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity assumption.

Accepted Answer

Under the business entity assumption, ec

Question 13

About 90% of the businesses in the United States are organized as corporations.

Accepted Answer

A) True 
 B)False

Question 14

The assets and liabilities of Rocky's Day Spa at December 31 and expenses for the year are listed below. The stockholders' equity was $68,000 ($48,000 in Common Stock and $20,000 in Retained Earnings) at January 1. The shareholders invested in an additional $10,000 of common stock during the year. Net income for the year is $45,625. $\begin{array}{|l|c|l|r|}
\hline \text { Accounts payable } & \$ 4,375 &\text { Spa operating expense } & \$ 23,760 \
\hline \text { Accounts receivable } &8,490& \text {  Office expense } & 2,470 \
\hline \text { Cash } & 13,980& \text {Spa supplies } & 9,230 \
\hline \text { Fees earned } &???& \text {  Wages expense } & 26,580 \
\hline \text { Spa furniture \& equipment } & 56,000& \text { Dividends } & 38,170 \
\hline \text { Computers } & 2,130 & \
\hline
\end{array}$ ?
Prepare an income statement for Rocky's Day Spa for the current year ended December 31.

Accepted Answer

\(\begin{array}{c}
\text {Rocky's Day Sp

Question 15

A formal presentation of the accounting equation

Accepted Answer

A) Income statement 
B) Balance sheet 
C) Statement of stockholder's equity 
D) Statement of cash flows 
A) Income statement 
B) Balance sheet 
C) Statement of stockholder's equity 
D) Statement of cash flows

Question 16

Within the United States, the dominant body in the primary development of accounting principles is the

Accepted Answer

A)  American Institute of Certified Public Accountants (AICP
A)  
B)  American Accounting Association (AA
A)  
C)  Financial Accounting Standards Board (FAS
B)  
D)  Institute of Management Accountants (IM
A)  
A)  American Institute of Certified Public Accountants (AICP
A)  
B)  American Accounting Association (AA
A)  
C)  Financial Accounting Standards Board (FAS
B)  
D)  Institute of Management Accountants (IM
A)

Question 17

Indicate how the following transactions affect the accounting equation.
​
(a) The purchase of supplies on account
(b) The purchase of supplies for cash
(c) Payment of cash dividends to stockholders
(d) Revenues received in cash
(e) Sale made on account

Accepted Answer

(a) Assets increase; liabilities increas

Question 18

The balance sheet represents the accounting equation.

Accepted Answer

A) True 
 B)False

Question 19

The Austin Land Company sold land for $85,000 in cash. The land was originally purchased for $65,000. At the time of the sale, $40,000 was still owed to Regions Bank. After the sale, The Austin Land Company paid off the loan. Explain the effect of the sale and the payoff of the loan on the accounting equation.

Accepted Answer

Total assets decrease $20,000 (Cash incr

Question 20

Match between columns
                        Premises:  Reports as of a specific date
 The first statement prepared
 Has three sections: operating, investing and financing
 Reports only revenues and expenses
 The second statement prepared
 A formal presentation of the accounting equation

Accepted Answer

The Answer of Income statement and Balance sheet and Statement is...

The rights of owners in a corporation are referred to as

The natural business year is a

The monetary unit assumption

The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of stockholders.

If the liabilities owed by a business total $300,000 and stockholders' equity is equal to $300,000, then the assets also total $300,000.

Krammer Company has liabilities equal to one fourth of the total assets. Krammer's stockholders' equity is $45,000. Using the accounting equation, what is the amount of liabilities for Krammer?

Many countries outside the United States use financial accounting standards issued by the

The majority of businesses end their fiscal year on December 31.

Explain the interrelationship between the balance sheet and the statement of cash flows.

A fiscal year for a business

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

Bob Johnson is the sole owner of Johnson's Carpet Cleaning Service. Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity assumption.

About 90% of the businesses in the United States are organized as corporations.

A formal presentation of the accounting equation

Within the United States, the dominant body in the primary development of accounting principles is the

Indicate how the following transactions affect the accounting equation. (a) The purchase of supplies on account (b) The purchase of supplies for cash (c) Payment of cash dividends to stockholders (d) Revenues received in cash (e) Sale made on account

The balance sheet represents the accounting equation.

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Exam 1: Accounting and Business

The rights of owners in a corporation are referred to as

The natural business year is a

The monetary unit assumption

The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of stockholders.

If the liabilities owed by a business total $300,000 and stockholders' equity is equal to $300,000, then the assets also total $300,000.

Krammer Company has liabilities equal to one fourth of the total assets. Krammer's stockholders' equity is $45,000. Using the accounting equation, what is the amount of liabilities for Krammer?

Many countries outside the United States use financial accounting standards issued by the

The majority of businesses end their fiscal year on December 31.

Explain the interrelationship between the balance sheet and the statement of cash flows.

A fiscal year for a business

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

Bob Johnson is the sole owner of Johnson's Carpet Cleaning Service. Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity assumption.

About 90% of the businesses in the United States are organized as corporations.

A formal presentation of the accounting equation

Within the United States, the dominant body in the primary development of accounting principles is the

Indicate how the following transactions affect the accounting equation. ​ (a) The purchase of supplies on account (b) The purchase of supplies for cash (c) Payment of cash dividends to stockholders (d) Revenues received in cash (e) Sale made on account

The balance sheet represents the accounting equation.

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Indicate how the following transactions affect the accounting equation. (a) The purchase of supplies on account (b) The purchase of supplies for cash (c) Payment of cash dividends to stockholders (d) Revenues received in cash (e) Sale made on account