Question 1

Which of the following describes the proper form of a balance sheet?

Accepted Answer

A) The heading sets forth the period of time covered. 
B) Cash is always the first asset listed,followed by permanent assets (such as land and buildings),and finally by assets such as receivables and supplies. 
C) Liabilities are listed before owners' equity. 
D) A subtotal for total assets plus total liabilities is shown. 
A) The heading sets forth the period of time covered. 
B) Cash is always the first asset listed,followed by permanent assets (such as land and buildings),and finally by assets such as receivables and supplies. 
C) Liabilities are listed before owners' equity. 
D) A subtotal for total assets plus total liabilities is shown.

Question 2

An inexperienced accounting intern at Tasso Company prepared the following income statement for the month of July 2014:   Instructions: Prepare a revised income statement in accordance with generally accepted accounting principles.

Accepted Answer

The answer of An inexperienced accounting intern at Tasso Company...

Question 3

On the statement of financial position,assets are normally presented in and liabilities are usually presented in:

Accepted Answer

A) Their order of permanence; the order in which they become due. 
B) The order in which they become due; their order of permanence. 
C) Order of profitability; order of liquidity. 
D) Order of liquidity; order of profitability. 
A) Their order of permanence; the order in which they become due. 
B) The order in which they become due; their order of permanence. 
C) Order of profitability; order of liquidity. 
D) Order of liquidity; order of profitability.

Question 4

If a company purchases equipment with cash,its total assets will increase.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following best defines an asset?

Accepted Answer

A) Something with physical form that is valued at cost in the accounting records. 
B) An economic resource owned by a business and expected to benefit future operations. 
C) An economic resource representing cash or the right to receive cash in the near future. 
D) Something owned by a business that has a ready market value. 
A) Something with physical form that is valued at cost in the accounting records. 
B) An economic resource owned by a business and expected to benefit future operations. 
C) An economic resource representing cash or the right to receive cash in the near future. 
D) Something owned by a business that has a ready market value.

Question 6

If during the current year,liabilities of Corbett's Store increased by $220,000 and owners' equity increased by $160,000,then:

Accepted Answer

A) Assets at the end of the year total $380,000. 
B) Assets at the end of the year total $60,000. 
C) Assets increased during the year by $380,000. 
D) Assets decreased during the year by $60,000. 
A) Assets at the end of the year total $380,000. 
B) Assets at the end of the year total $60,000. 
C) Assets increased during the year by $380,000. 
D) Assets decreased during the year by $60,000.

Question 7

The total liabilities of Hogan's Company on the balance sheet are $270,000; this amount is equal to three-fourths of the total assets.What is the amount of owners' equity?

Accepted Answer

A) $202,500. 
B) $90,000. 
C) $360,000. 
D) $630,000. 
A) $202,500. 
B) $90,000. 
C) $360,000. 
D) $630,000.

Question 8

Accounting terminology
Listed below are nine technical accounting terms introduced in this chapter:   Each of the following statements may (or may not)describe one of these technical terms.In the space provided below each statement,indicate the accounting term described,or answer "None" if the statement does not correctly describe any of the terms.Do not use a term more than once.
(A.)Having the financial ability to pay debts as they become due.
(B.)An assumption that a business will operate in the foreseeable future.
(C.)Economic resources owned by businesses that are expected to benefit future operations.
(D.)The debts or obligations of a business organization.
(E.)Assets = Liabilities + Owners' Equity
(F.)The principle which states that assets are valued in the balance sheet at their historical cost.
(G.)A residual amount equal to assets minus liabilities.

Accepted Answer

(A.)Liquidity; (B.)Going conce

Question 9

In a business organized as a corporation,it is not necessary to list the equity of each stockholder on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 10

Preparation of balance sheet after a series of transactions
The balance sheet was as follows for Custom Ceramics on February 1,2014:   During the first week of February,the following transactions occurred:
* The business used cash to pay off $5,000 of its accounts payable.(No payment was made on the notes payable.)
* Additional capital stock was issued to Joan Custom for $15,000 cash.
* Equipment was purchased on credit for $1,800.
* The business collected $4,000 cash from accounts receivable.
Complete the balance sheet for Custom Ceramics as of February 8,2014.

Accepted Answer

The answer of Preparation of balance sheet after a series...

Question 11

Forms of Business Organization
State and describe the three most common forms of business organizations in the United States.

Accepted Answer

(1)Sole Proprietorship - One person,unli

Question 12

Which of the following transactions would cause an increase in both assets and owners' equity?

Accepted Answer

A) Investment of cash in the business by the owner. 
B) Sale of land for a price less than its cost. 
C) Borrowing money from a bank. 
D) Sale of land for cash at a price equal to its cost. 
A) Investment of cash in the business by the owner. 
B) Sale of land for a price less than its cost. 
C) Borrowing money from a bank. 
D) Sale of land for cash at a price equal to its cost.

Question 13

Each year,the accountant for Southern Real Estate Company adjusts the recorded value of each asset to its market value.Using these market value figures on the balance sheet violates:

Accepted Answer

A) The accounting equation. 
B) The stable-dollar assumption. 
C) The business entity concept. 
D) The cost principle. 
A) The accounting equation. 
B) The stable-dollar assumption. 
C) The business entity concept. 
D) The cost principle.

Question 14

During the current year,the assets of Quality Stairs increased by $175,000 and the liabilities decreased by $15,000.If the owners' equity in the business is $475,000 at the end of the year,the owners' equity at the beginning of the year must have been:

Accepted Answer

A) $335,000. 
B) $285,000. 
C) $665,000. 
D) $615,000. 
A) $335,000. 
B) $285,000. 
C) $665,000. 
D) $615,000.

Question 15

List the following accounts in the order that they would appear in a balance sheet.
Capital Stock
Equipment
Accounts Receivable
Retained Earnings
Revenue
Accounts Payable
Cash
Rent Expense

Accepted Answer

Cash,Accounts Receivable,Equip

Question 16

Development of generally accepted accounting principles
(A.)What is meant by the phrase "generally accepted accounting principles"?
(B.)Explain the concept of the business entity and how it relates to generally accepted accounting principles.

Accepted Answer

(A.)Generally accepted accounting princi

Question 17

The going concern principle assumes that the business will continue indefinitely.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following assets would most likely be listed last on a statement of financial position?

Accepted Answer

A) Land. 
B) Cash. 
C) Accounts receivable. 
D) Equipment. 
A) Land. 
B) Cash. 
C) Accounts receivable. 
D) Equipment.

Question 19

Which of the following will not cause a change in the owners' equity of a business?

Accepted Answer

A) Purchase of land with cash. 
B) Withdrawal of cash by the owner. 
C) Sale of land at a profit. 
D) Losses from unprofitable operations. 
A) Purchase of land with cash. 
B) Withdrawal of cash by the owner. 
C) Sale of land at a profit. 
D) Losses from unprofitable operations.

Question 20

Owners' equity in a business increases as a result of which of the following?

Accepted Answer

A) Payments of cash to the owners. 
B) Losses from unprofitable operation of the business. 
C) Earnings from profitable operation of the business. 
D) Borrowing from a commercial bank. 
A) Payments of cash to the owners. 
B) Losses from unprofitable operation of the business. 
C) Earnings from profitable operation of the business. 
D) Borrowing from a commercial bank.

Exam 2: Basic Financial Statements

Which of the following describes the proper form of a balance sheet?

An inexperienced accounting intern at Tasso Company prepared the following income statement for the month of July 2014: Instructions: Prepare a revised income statement in accordance with generally accepted accounting principles.

On the statement of financial position,assets are normally presented in and liabilities are usually presented in:

If a company purchases equipment with cash,its total assets will increase.

Which of the following best defines an asset?

If during the current year,liabilities of Corbett's Store increased by $220,000 and owners' equity increased by $160,000,then:

The total liabilities of Hogan's Company on the balance sheet are $270,000; this amount is equal to three-fourths of the total assets.What is the amount of owners' equity?

In a business organized as a corporation,it is not necessary to list the equity of each stockholder on the balance sheet.

Forms of Business Organization State and describe the three most common forms of business organizations in the United States.

Which of the following transactions would cause an increase in both assets and owners' equity?

Each year,the accountant for Southern Real Estate Company adjusts the recorded value of each asset to its market value.Using these market value figures on the balance sheet violates:

During the current year,the assets of Quality Stairs increased by $175,000 and the liabilities decreased by $15,000.If the owners' equity in the business is $475,000 at the end of the year,the owners' equity at the beginning of the year must have been:

List the following accounts in the order that they would appear in a balance sheet. Capital Stock Equipment Accounts Receivable Retained Earnings Revenue Accounts Payable Cash Rent Expense

Development of generally accepted accounting principles (A.)What is meant by the phrase "generally accepted accounting principles"? (B.)Explain the concept of the business entity and how it relates to generally accepted accounting principles.

The going concern principle assumes that the business will continue indefinitely.

Which of the following assets would most likely be listed last on a statement of financial position?

Which of the following will not cause a change in the owners' equity of a business?

Owners' equity in a business increases as a result of which of the following?

Accounting: Information for Decision Making

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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