Question 1

Goods purchased on account for future use in the business, such as supplies, are called

Accepted Answer

A)  prepaid liabilities 
B)  revenues 
C)  prepaid expenses 
D)  liabilities 
A)  prepaid liabilities 
B)  revenues 
C)  prepaid expenses 
D)  liabilities

Question 2

Match the following accounts to the financial statement where they can be found. (Hint: Some of the accounts can be found in more than one financial statement.)
A. Balance Sheet
B. Income Statement
C. Statement of Cash Flows
D. Retained Earnings Statement
 
$\begin{array} { | l | l | } 
\hline \# & \text { Account } \
\hline 1 . & \text { Dividends } \
\hline 2 . & \text { Revenues } \
\hline 3 . & \text { Supplies } \
\hline 4 . & \text { Land } \
\hline 5 . & \text { Accounts Payable } \
\hline 6 . & \text { Accounts Receivable } \
\hline 7 . & \text { Operating Activities } \
\hline 8 . & \text { Wages Expense } \
\hline 9 . & \text { Net Income } \
\hline 10 . & \text { Cash } \
\hline
\end{array}$

Accepted Answer

The answer of Match the following accounts to the financial...

Question 3

A business is an organization in which basic resources or inputs, like materials and labor, are assembled and processed to provide outputs in the form of goods or services to customers.

Accepted Answer

A) True 
 B)False

Question 4

Earning revenue

Accepted Answer

A)  increases assets, increases stockholders' equity 
B)  increases assets, decreases stockholders' equity 
C)  increases one asset, decreases another asset 
D)  decreases assets, increases liabilities 
A)  increases assets, increases stockholders' equity 
B)  increases assets, decreases stockholders' equity 
C)  increases one asset, decreases another asset 
D)  decreases assets, increases liabilities

Question 5

The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing entities.

Accepted Answer

A) True 
 B)False

Question 6

Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The retained earnings statement (RE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?

Accepted Answer

A)  I, RE, B 
B)  B, I, RE 
C)  RE, I, B 
D)  B, RE, I 
A)  I, RE, B 
B)  B, I, RE 
C)  RE, I, B 
D)  B, RE, I

Question 7

Expenses are assets that are used up during the process of earning revenue.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following groups are considered to be internal usersof accounting information?

Accepted Answer

A)  Employees and customers 
B)  Customers and vendors 
C)  Employees and managers 
D)  Government and banks 
A)  Employees and customers 
B)  Customers and vendors 
C)  Employees and managers 
D)  Government and banks

Question 9

Net income and net profit do not mean the same thing.

Accepted Answer

A) True 
 B)False

Question 10

Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting principles?

Accepted Answer

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

Question 11

Selected transaction data of a business for September are summarized below. Determine the following amounts for September: (a) total revenue, (b) total expenses, (c) net income.

Accepted Answer

The answer of Selected transaction data of a business for...

Question 12

Darnell Company purchased $88,000 of computer equipment from Joseph Company. Darnell Company paid for the equipment using cash that had been obtained from the sale of capital stock to Donnie Darnell.
Which entity or entities (Darnell Company, Joseph Company, Donnie Darnell) should record the transaction involving the computer equipment on their accounting records?

Accepted Answer

Darnell Co

Question 13

An account receivable is a claim against a customer arising from a sale on account.

Accepted Answer

A) True 
 B)False

Question 14

The accounting equation can be expressed as Assets - Liabilities = Stockholders' Equity.

Accepted Answer

A) True 
 B)False

Question 15

Determine the missing amount "X" for each of the following:
 $\begin{array} { | l | l | l | } 
\hline \text { Assets } & \text { Liabilities } & \text { Stockholders' Equity } \
\hline \text { a. } \$ 78,500 & \$ 37,600 & \mathrm { X } \
\hline \text { b. } \mathrm { X } & \$ 53,280 & \$ 145,000 \
\hline \text { c. } \$ 49,500 & \mathrm { X } & \$ 34,000 \
\hline
\end{array}$

Accepted Answer

a. $78,500 - 37,600

Question 16

Profit is the difference between

Accepted Answer

A)  assets and liabilities 
B)  the incoming cash and outgoing cash 
C)  the assets purchased with cash invested by stockholders and the cash spent to operate the business 
D)  the amounts received from customers for goods or services and the amounts paid for the inputs used to provide the goods or services 
A)  assets and liabilities 
B)  the incoming cash and outgoing cash 
C)  the assets purchased with cash invested by stockholders and the cash spent to operate the business 
D)  the amounts received from customers for goods or services and the amounts paid for the inputs used to provide the goods or services

Question 17

Gomez Service Company paid its first installment on a note payable for an amount of $2,000. How will this transaction affect the accounting equation?

Accepted Answer

A)  Increase Liabilities (Notes Payable) and decrease Assets (Cash) 
B)  Decrease Assets (Cash) and decrease Stockholders' Equity (Note Payable Expense) 
C)  Decrease Assets (Cash) and decrease Assets (Notes Receivable) 
D)  Decrease Assets (Cash) and decrease Liabilities (Notes Payable) 
A)  Increase Liabilities (Notes Payable) and decrease Assets (Cash) 
B)  Decrease Assets (Cash) and decrease Stockholders' Equity (Note Payable Expense) 
C)  Decrease Assets (Cash) and decrease Assets (Notes Receivable) 
D)  Decrease Assets (Cash) and decrease Liabilities (Notes Payable)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The Financial Accounting Standards Board (FASB) is the authoritative body that has primary responsibility for developing accounting principles.

Accepted Answer

A) True 
 B)False

Question 20

The debt created by a business when it makes a purchase on account is referred to as an

Accepted Answer

A)  account payable 
B)  account receivable 
C)  asset 
D)  prepaid expense 
A)  account payable 
B)  account receivable 
C)  asset 
D)  prepaid expense

Exam 1: Introduction to Accounting and Business

Goods purchased on account for future use in the business, such as supplies, are called

A business is an organization in which basic resources or inputs, like materials and labor, are assembled and processed to provide outputs in the form of goods or services to customers.

Earning revenue

The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing entities.

Expenses are assets that are used up during the process of earning revenue.

Which of the following groups are considered to be internal usersof accounting information?

Net income and net profit do not mean the same thing.

Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting principles?

Selected transaction data of a business for September are summarized below. Determine the following amounts for September: (a) total revenue, (b) total expenses, (c) net income.

An account receivable is a claim against a customer arising from a sale on account.

The accounting equation can be expressed as Assets - Liabilities = Stockholders' Equity.

Determine the missing amount "X" for each of the following: Assets Liabilities Stockholders' Equity a. \ 78,500 \ 37,600 b. \ 53,280 \ 145,000 c. \ 49,500 \ 34,000

Profit is the difference between

Gomez Service Company paid its first installment on a note payable for an amount of $2,000. How will this transaction affect the accounting equation?

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

The Financial Accounting Standards Board (FASB) is the authoritative body that has primary responsibility for developing accounting principles.

The debt created by a business when it makes a purchase on account is referred to as an

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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