Question 1

Companies using a low-cost emphasis provide products and services that compete on features other than price.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following would not be an example of a merchandising business?

Accepted Answer

A)  The Walt Disney Company 
B)  JCPenney 
C)  Amazon.com 
D)  Wal-Mart 
A)  The Walt Disney Company 
B)  JCPenney 
C)  Amazon.com 
D)  Wal-Mart

Question 3

Three different companies--A, B, and C--have the same balance sheet at the beginning and the end of a year. These are summarized below:
 $\begin{array}{lll}
 \text {Total Libilities}&
\text {Total Assets}\
\$ 250,000 & \$ 500,000 & \text { Begiming of the year } \
\$ 350,000 & \$ 1,200,000 & \text { End of the year }
\end{array}$ Given the data above and the additional information for each company below, determine the net income (loss) for each company.

Accepted Answer

None

Question 4

What is the primary objective of most businesses?

Accepted Answer

A)  To maximize profits 
B)  To pay dividends to stockholders 
C)  To provide a benefit to society 
D)  To manufacture a quality product 
A)  To maximize profits 
B)  To pay dividends to stockholders 
C)  To provide a benefit to society 
D)  To manufacture a quality product

Question 5

Which of the following is considered an asset until consumed?

Accepted Answer

A)  Accounts payable 
B)  Prepaid expense 
C)  Accounts receivable 
D)  Stockholders' equity 
A)  Accounts payable 
B)  Prepaid expense 
C)  Accounts receivable 
D)  Stockholders' equity

Question 6

A note payable requires payment of the amount borrowed plus:

Accepted Answer

A)  interest. 
B)  tax. 
C)  overhead. 
D)  dividend. 
A)  interest. 
B)  tax. 
C)  overhead. 
D)  dividend.

Question 7

Shares of ownership are evidenced by issuing:

Accepted Answer

A)  shares payable. 
B)  commercial paper. 
C)  shares of stock. 
D)  notes payable. 
A)  shares payable. 
B)  commercial paper. 
C)  shares of stock. 
D)  notes payable.

Question 8

The objective of most businesses is to maximize profits.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an appropriate representation of the accounting equation?

Accepted Answer

A)  Assets + Liabilities = Stockholders' equity 
B)  Assets = Liabilities + Stockholders' equity 
C)  Assets = Liabilities 
D)  Assets = Liabilities + Retained earnings 
A)  Assets + Liabilities = Stockholders' equity 
B)  Assets = Liabilities + Stockholders' equity 
C)  Assets = Liabilities 
D)  Assets = Liabilities + Retained earnings

Question 10

Which statement is normally prepared first?

Accepted Answer

A)  Income statement 
B)  Balance sheet 
C)  Statement of cash flows 
D)  Retained earnings statement 
A)  Income statement 
B)  Balance sheet 
C)  Statement of cash flows 
D)  Retained earnings statement

Question 11

Which of the items below is nota business organization form?

Accepted Answer

A)  Venture entrepreneurship 
B)  Proprietorship 
C)  Partnership 
D)  Corporation 
A)  Venture entrepreneurship 
B)  Proprietorship 
C)  Partnership 
D)  Corporation

Question 12

Indicate whether each of the following activities would be reported on the statement of cash flows as an operating activity, an investing activity, a financing activity, or does not appear on the statement of cash flows.
 (a) Cash paid for building
( b) Cash paid to suppliers
(c) Casin paid for dividends
(d) Cashreceived from customers
(e) Cash received from the sale of capital stock.
(f) Cashreceive d from the sale of a building
(g) Borrowed cash from a bank

Accepted Answer

(a) investing activity
(b)  Op

Question 13

What is the basic accounting equation, and which financial statement is prepared from this equation?

Accepted Answer

Assets = Liabilities

Question 14

Which of the following isnot a characteristic of a corporation?

Accepted Answer

A)  Corporations are organized as a separate legal taxable entity. 
B)  Ownership is divided into shares of stock. 
C)  Corporations experience an ease in obtaining large amounts of resources by issuing stock. 
D)  A corporation can elect to be taxed as a partnership. 
A)  Corporations are organized as a separate legal taxable entity. 
B)  Ownership is divided into shares of stock. 
C)  Corporations experience an ease in obtaining large amounts of resources by issuing stock. 
D)  A corporation can elect to be taxed as a partnership.

Question 15

The stockholders' equity of a company should equal the sum of its total assets and total liabilities.

Accepted Answer

A) True 
 B)False

Question 16

Motel 6, a company that helps customers find budget motels across the nation, is an example of a business using which of the following?

Accepted Answer

A)  Low-cost emphasis 
B)  Outreach emphasis 
C)  Customer emphasis 
D)  Premium-price emphasis 
A)  Low-cost emphasis 
B)  Outreach emphasis 
C)  Customer emphasis 
D)  Premium-price emphasis

Companies using a low-cost emphasis provide products and services that compete on features other than price.

Which of the following would not be an example of a merchandising business?

What is the primary objective of most businesses?

Which of the following is considered an asset until consumed?

A note payable requires payment of the amount borrowed plus:

Shares of ownership are evidenced by issuing:

The objective of most businesses is to maximize profits.

Which of the following is an appropriate representation of the accounting equation?

Which statement is normally prepared first?

Which of the items below is nota business organization form?

What is the basic accounting equation, and which financial statement is prepared from this equation?

Which of the following isnot a characteristic of a corporation?

The stockholders' equity of a company should equal the sum of its total assets and total liabilities.

Motel 6, a company that helps customers find budget motels across the nation, is an example of a business using which of the following?

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 1: The Role of Accounting in Business

Companies using a low-cost emphasis provide products and services that compete on features other than price.

Which of the following would not be an example of a merchandising business?

What is the primary objective of most businesses?

Which of the following is considered an asset until consumed?

A note payable requires payment of the amount borrowed plus:

Shares of ownership are evidenced by issuing:

The objective of most businesses is to maximize profits.

Which of the following is an appropriate representation of the accounting equation?

Which statement is normally prepared first?

Which of the items below is nota business organization form?

What is the basic accounting equation, and which financial statement is prepared from this equation?

Which of the following isnot a characteristic of a corporation?

The stockholders' equity of a company should equal the sum of its total assets and total liabilities.

Motel 6, a company that helps customers find budget motels across the nation, is an example of a business using which of the following?

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters