Question 1

For reporting purposes,the personal assets and debts of a business owner should be combined with the assets and debts of the business.

Accepted Answer

A) True 
 B)False

Question 2

Owner's equity equals assets minus liabilities.

Accepted Answer

A) True 
 B)False

Question 3

Managerial accounting focuses on internal decision making.

Accepted Answer

A) True 
 B)False

Question 4

Carrying out professional responsibilities with competence and diligence is called

Accepted Answer

A) integrity. 
B) independence. 
C) objectivity. 
D) due care. 
A) integrity. 
B) independence. 
C) objectivity. 
D) due care.

Question 5

A major function of financial accounting is to provide the investor with relevant and useful information.

Accepted Answer

A) True 
 B)False

Question 6

What is independence,and why is it important for a CPA to maintain it when conducting an audit?

Accepted Answer

Independence means having no financial o

Question 7

Use the following information to calculate at or for the year ended December 31,2014:
(a)net income, (b)owner's capital, (c)total liabilities and owner's equity,and (d)accounts receivable.

Accepted Answer

The answer of Use the following information to calculate at...

Question 8

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 9

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 10

An increase in expenses will have the effect of reducing owner's equity.

Accepted Answer

A) True 
 B)False

Question 11

Owner's equity equals cumulative net income or loss plus owner investments minus cumulative withdrawals.

Accepted Answer

A) True 
 B)False

Question 12

In general,one partner acting alone cannot obligate the partnership to another party.

Accepted Answer

A) True 
 B)False

Question 13

The balance sheet is also known as the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following might be motivation for fraudulently covering up a financial weakness?

Accepted Answer

A) to obtain a loan 
B) to meet stockholder expectations 
C) to obtain bonus compensation 
D) all of these are possible motivations 
A) to obtain a loan 
B) to meet stockholder expectations 
C) to obtain bonus compensation 
D) all of these are possible motivations

Question 15

The stockholders of a corporation elect the board of directors.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Following are the total assets and liabilities at the beginning and end of the year for Hagedorn Company:
   Determine the net income or loss for the year in each of the following situations:
a.The owner made no investments in the business and no withdrawals were made during the year.
b.The owner made an investment of $20,000 and withdrew $12,000 during the year.

Accepted Answer

a.[($108,000 - $40,000)- ($70,

Question 18

The statement of cash flows would disclose the purchase of a building for cash

Accepted Answer

A) nowhere on the statement. 
B) in the operating activities section. 
C) in the investing activities section. 
D) in the financing activities section. 
A) nowhere on the statement. 
B) in the operating activities section. 
C) in the investing activities section. 
D) in the financing activities section.

Question 19

The Internal Revenue Service is responsible for issuing accounting standards for state and local governments.

Accepted Answer

A) True 
 B)False

Question 20

Cash is another term for owner's equity.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting Principles and the Financial Statements

For reporting purposes,the personal assets and debts of a business owner should be combined with the assets and debts of the business.

Owner's equity equals assets minus liabilities.

Managerial accounting focuses on internal decision making.

Carrying out professional responsibilities with competence and diligence is called

A major function of financial accounting is to provide the investor with relevant and useful information.

What is independence,and why is it important for a CPA to maintain it when conducting an audit?

Use the following information to calculate at or for the year ended December 31,2014: (a)net income, (b)owner's capital, (c)total liabilities and owner's equity,and (d)accounts receivable.

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

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

An increase in expenses will have the effect of reducing owner's equity.

Owner's equity equals cumulative net income or loss plus owner investments minus cumulative withdrawals.

In general,one partner acting alone cannot obligate the partnership to another party.

The balance sheet is also known as the statement of financial position.

Which of the following might be motivation for fraudulently covering up a financial weakness?

The stockholders of a corporation elect the board of directors.

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

The statement of cash flows would disclose the purchase of a building for cash

The Internal Revenue Service is responsible for issuing accounting standards for state and local governments.

Cash is another term for owner's equity.

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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