Question 1

Owner's equity equals assets minus liabilities.

Accepted Answer

A) True 
 B)False

Question 2

In general, any partner can obligate the partnership to another party.

Accepted Answer

A) True 
 B)False

Question 3

The Securities and Exchange Commission is an accounting information user with a direct financial interest.

Accepted Answer

A) True 
 B)False

Question 4

When a corporate stockholder sells his or her shares of stock, the corporation is technically dissolved.

Accepted Answer

A) True 
 B)False

Question 5

A corporation is an economic unit that is legally separate from its owners.

Accepted Answer

A) True 
 B)False

Question 6

A company's ability to attract and hold investment capital ultimately depends on its

Accepted Answer

A)  budgeting. 
B)  planning. 
C)  liquidity. 
D)  profitability. 
A)  budgeting. 
B)  planning. 
C)  liquidity. 
D)  profitability.

Question 7

One way of stating the accounting equation is: Assets + Liabilities = Owner's Equity.

Accepted Answer

A) True 
 B)False

Question 8

The liability of corporate stockholders is limited to the amount of their investment.

Accepted Answer

A) True 
 B)False

Question 9

Knowledge of the exchange rate is necessary to apply the money measure concept in case of international transactions.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is the correct accounting equation?

Accepted Answer

A)  Assets = Liabilities + Owner's Equity 
B)  Assets + Owner's Equity = Liabilities 
C)  Assets = Liabilities - Owner's Equity 
D)  Assets + Liabilities = Owner's Equity 
A)  Assets = Liabilities + Owner's Equity 
B)  Assets + Owner's Equity = Liabilities 
C)  Assets = Liabilities - Owner's Equity 
D)  Assets + Liabilities = Owner's Equity

Question 11

Those who lend money or deliver goods and services before being paid are called

Accepted Answer

A)  investors. 
B)  debtors. 
C)  underwriters. 
D)  creditors. 
A)  investors. 
B)  debtors. 
C)  underwriters. 
D)  creditors.

Question 12

The Sarbanes-Oxley Act orders the SEC to hold chief executives and CFOs responsible for the accuracy of their company's financial statements.

Accepted Answer

A) True 
 B)False

Question 13

Use the following accounts and information to prepare, in good form, an income statement, statement of owner's equity, and balance sheet for Cray Enterprises for the year ended December 31, 2010.
 $\begin{array}{lrlr}
\text { Accounts Payable } & \$, 800 & \text { Land } & \$ 39,000 \
\text { Accounts Receivable } & 600 & \text { Notes Payable } & 6,000 \
\text { Buildings } & 52,000 & \text { Rent Expense } & 3,600 \
\text { Cash } & 26,200 & \text { Salaries Expense } & 8,400 \
\text { Commissions Earned } & 19,000 & \text { Supplies } & 400 \
\text { Don Cray, Capital, Dec. 31, } & 104,400 & & \
2009 & & & \
\text { Don Cray, Withdrawals } & 3,000 & & \
\text { Insurance Expense } & 1,000 & &
\end{array}$

Accepted Answer

The answer of Use the following accounts and information to...

Question 14

Criminal penalties cannot be imposed on those who prepare fraudulent financial statements.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following represents the proper order of financial statement preparation?

Accepted Answer

A)  Statement of cash flows, balance sheet, income statement, statement of owner's equity 
B)  Statement of owner's equity, income statement, statement of cash flows, balance sheet 
C)  Balance sheet, statement of cash flows, statement of owner's equity, income statement 
D)  Income statement, statement of owner's equity, balance sheet, statement of cash flows 
A)  Statement of cash flows, balance sheet, income statement, statement of owner's equity 
B)  Statement of owner's equity, income statement, statement of cash flows, balance sheet 
C)  Balance sheet, statement of cash flows, statement of owner's equity, income statement 
D)  Income statement, statement of owner's equity, balance sheet, statement of cash flows

Question 16

Payment to a creditor is an example of a nonexchange business transaction.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following transactions does not involve an exchange of value?

Accepted Answer

A)  Payment of a debt 
B)  Purchase of a building on credit 
C)  Borrowing money 
D)  Loss from theft 
A)  Payment of a debt 
B)  Purchase of a building on credit 
C)  Borrowing money 
D)  Loss from theft

Question 18

Net income is another term for revenues.

Accepted Answer

A) True 
 B)False

Question 19

The statement of owner's equity relates the income statement to the balance sheet by showing how the owner's Capital account changed during the accounting period.

Accepted Answer

A) True 
 B)False

Question 20

How does the statement of owner's equity relate to the income statement and the balance sheet?

Accepted Answer

The statement of owner's equity provides

Exam 1: Uses of Accounting Information and the Financial Statements

Owner's equity equals assets minus liabilities.

In general, any partner can obligate the partnership to another party.

The Securities and Exchange Commission is an accounting information user with a direct financial interest.

When a corporate stockholder sells his or her shares of stock, the corporation is technically dissolved.

A corporation is an economic unit that is legally separate from its owners.

A company's ability to attract and hold investment capital ultimately depends on its

One way of stating the accounting equation is: Assets + Liabilities = Owner's Equity.

The liability of corporate stockholders is limited to the amount of their investment.

Knowledge of the exchange rate is necessary to apply the money measure concept in case of international transactions.

Which of the following is the correct accounting equation?

Those who lend money or deliver goods and services before being paid are called

The Sarbanes-Oxley Act orders the SEC to hold chief executives and CFOs responsible for the accuracy of their company's financial statements.

Criminal penalties cannot be imposed on those who prepare fraudulent financial statements.

Which of the following represents the proper order of financial statement preparation?

Payment to a creditor is an example of a nonexchange business transaction.

Which of the following transactions does not involve an exchange of value?

Net income is another term for revenues.

The statement of owner's equity relates the income statement to the balance sheet by showing how the owner's Capital account changed during the accounting period.

How does the statement of owner's equity relate to the income statement and the balance sheet?

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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