Question 1

International Financial Reporting Standards are comparatively more specific and more rule-based than U.S.GAAP.

Accepted Answer

A) True 
 B)False  False

Question 2

Caleb Brown has been the sole owner of a bicycle sales and repair shop for several years.Which of the following business types would limit Caleb's personal liability exposure to the entity's debts?

Accepted Answer

A) partnership 
B) limited-liability company 
C) sole proprietorship 
D) limited-liability partnership 
A) partnership 
B) limited-liability company 
C) sole proprietorship 
D) limited-liability partnership B

Question 3

The owner makes a withdrawal from Aventis Company.How does this transaction affect the accounting equation?

Accepted Answer

A) The assets,liabilities,and equity remain the same. 
B) The assets decrease and equity decreases. 
C) The assets increase and liabilities decrease. 
D) The assets decrease and equity increases. 
A) The assets,liabilities,and equity remain the same. 
B) The assets decrease and equity decreases. 
C) The assets increase and liabilities decrease. 
D) The assets decrease and equity increases. B

Question 4

Wallace Repair Company incurred $1,500 as a labor expense and promised to pay the labor agency within 30 days.Which of the following will decrease as a result of this transaction?

Accepted Answer

A) Assets 
B) Owner's equity 
C) Liabilities 
D) Revenues 
A) Assets 
B) Owner's equity 
C) Liabilities 
D) Revenues

Question 5

________ are the owner's contributions of cash or other assets.

Accepted Answer

A) Assets 
B) Owner's Withdrawals 
C) Owner's Capital 
D) Liabilities 
A) Assets 
B) Owner's Withdrawals 
C) Owner's Capital 
D) Liabilities

Question 6

Johnson Repair Service had net income for the year of $125,000.In addition,the balance sheet reports the following balances:
   
Calculate the return on assets (ROA)for Johnson Repair Service for the year ending December 31,2016.

Accepted Answer

@#IMG-DLM& 
Return on Assets = Net Incom

Question 7

A creditor is any person who has an ownership interest in a business.

Accepted Answer

A) True 
 B)False

Question 8

Fitch Supply Services received $1,000 cash from a customer;the amount was owed to the business from the previous month.What is the effect of this transaction on the accounting equation?

Accepted Answer

A) Accounts Receivable increases and Service Revenue increases 
B) Cash increases and Accounts Receivable decreases 
C) Cash increases and Service Revenue increases 
D) Cash increases and Accounts Payable decreases 
A) Accounts Receivable increases and Service Revenue increases 
B) Cash increases and Accounts Receivable decreases 
C) Cash increases and Service Revenue increases 
D) Cash increases and Accounts Payable decreases

Question 9

An accounting firm collected cash on account.As a result of this transaction,total assets,liabilities,and equity are all unchanged.

Accepted Answer

A) True 
 B)False

Question 10

The primary objective of financial reporting is to provide information useful for making investment and lending decisions.

Accepted Answer

A) True 
 B)False

Question 11

A creditor is a person who owes money to the business.

Accepted Answer

A) True 
 B)False

Question 12

A corporation pays income taxes on its earnings.

Accepted Answer

A) True 
 B)False

Question 13

The net income of Avid Camera Services is $25,000.The beginning and ending owner's equity balances were $34,000 and $53,000,respectively.The owner made no additional contributions.Calculate the amount of owner's withdrawals.

Accepted Answer

A) $16,000 
B) $6,000 
C) $9,000 
D) $8,000 
A) $16,000 
B) $6,000 
C) $9,000 
D) $8,000

Question 14

The assets of Moon Company are $150,000 and the total liabilities are $20,000.The equity is ________.

Accepted Answer

A) $150,000 
B) $170,000 
C) $20,000 
D) $130,000 
A) $150,000 
B) $170,000 
C) $20,000 
D) $130,000

Question 15

Jeffery Company has just completed operations for the year ended December 31,2016.This is the second year of operations for the company.The following data have been assembled for the business.
   
Prepare the income statement.Use a proper heading.

Accepted Answer

@#IMG-DLM& 
Revenues

Question 16

The amount of net income is transferred from ________ to ________.

Accepted Answer

A) the income statement;the statement of owner's equity 
B) the balance sheet;the statement of cash flows 
C) the balance sheet;the income statement 
D) the income statement;the statement of expenditures 
A) the income statement;the statement of owner's equity 
B) the balance sheet;the statement of cash flows 
C) the balance sheet;the income statement 
D) the income statement;the statement of expenditures

Question 17

Withdrawals are the expenses of a business.

Accepted Answer

A) True 
 B)False

Question 18

A debt that a business owes is called ________.

Accepted Answer

A) an asset 
B) a liability 
C) stockholders' equity 
D) revenue 
A) an asset 
B) a liability 
C) stockholders' equity 
D) revenue

Question 19

The income statement also is called the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 20

Following is a list of account balances of Morris Mowing Services as of December 31 of the first year of operations.
 
Calculate the net income.

Accepted Answer

A) $1,100 
B) $32,000 
C) $1,000 
D) $33,000 
A) $1,100 
B) $32,000 
C) $1,000 
D) $33,000

Exam 1: Accounting and the Business Environment

International Financial Reporting Standards are comparatively more specific and more rule-based than U.S.GAAP.

Caleb Brown has been the sole owner of a bicycle sales and repair shop for several years.Which of the following business types would limit Caleb's personal liability exposure to the entity's debts?

The owner makes a withdrawal from Aventis Company.How does this transaction affect the accounting equation?

Wallace Repair Company incurred $1,500 as a labor expense and promised to pay the labor agency within 30 days.Which of the following will decrease as a result of this transaction?

________ are the owner's contributions of cash or other assets.

Johnson Repair Service had net income for the year of $125,000.In addition,the balance sheet reports the following balances: Calculate the return on assets (ROA)for Johnson Repair Service for the year ending December 31,2016.

A creditor is any person who has an ownership interest in a business.

Fitch Supply Services received $1,000 cash from a customer;the amount was owed to the business from the previous month.What is the effect of this transaction on the accounting equation?

An accounting firm collected cash on account.As a result of this transaction,total assets,liabilities,and equity are all unchanged.

The primary objective of financial reporting is to provide information useful for making investment and lending decisions.

A creditor is a person who owes money to the business.

A corporation pays income taxes on its earnings.

The net income of Avid Camera Services is $25,000.The beginning and ending owner's equity balances were $34,000 and $53,000,respectively.The owner made no additional contributions.Calculate the amount of owner's withdrawals.

The assets of Moon Company are $150,000 and the total liabilities are $20,000.The equity is ________.

Jeffery Company has just completed operations for the year ended December 31,2016.This is the second year of operations for the company.The following data have been assembled for the business. Prepare the income statement.Use a proper heading.

The amount of net income is transferred from ________ to ________.

Withdrawals are the expenses of a business.

A debt that a business owes is called ________.

The income statement also is called the statement of financial position.

Following is a list of account balances of Morris Mowing Services as of December 31 of the first year of operations. Calculate the net income.

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

The amount of net income is transferred from to .