Question 1

The monetary unit assumption means that all international transactions must be expressed in dollars.

Accepted Answer

A) True 
 B)False

Question 2

Planning activities are the means an organization uses to pay for resources like land, buildings, and equipment to carry out its plans.

Accepted Answer

A) True 
 B)False

Question 3

The term __________________ refers to a liability that promises a future outflow of resources.

Accepted Answer

The answer of The term __________________ refers to a liability...

Question 4

The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that the building was easily worth $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Maxim to record the building on its records at $500,000?

Accepted Answer

A)  Monetary unit assumption. 
B)  Going-concern assumption. 
C)  Cost principle. 
D)  Business entity assumption. 
E)  Revenue recognition principle. 
A)  Monetary unit assumption. 
B)  Going-concern assumption. 
C)  Cost principle. 
D)  Business entity assumption. 
E)  Revenue recognition principle.

Question 5

The ____________________ describes a company's revenues and expenses over a period of time due to earnings activities.

Accepted Answer

The answer of The ____________________ describes a company's revenues and...

Question 6

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

Accepted Answer

A) True 
 B)False

Question 7

The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Accepted Answer

A) True 
 B)False

Question 8

A balance sheet or a statement of financial position lists:

Accepted Answer

A)  The types and amounts of the revenues and expenses of a business. 
B)  Only the information about what happened to equity during a time period. 
C)  The types and amounts of assets, liabilities, and equity of a business as of a specific date. 
D)  The inflows and outflows of cash during the period. 
E)  The assets and liabilities of a company but not the owner's equity. 
A)  The types and amounts of the revenues and expenses of a business. 
B)  Only the information about what happened to equity during a time period. 
C)  The types and amounts of assets, liabilities, and equity of a business as of a specific date. 
D)  The inflows and outflows of cash during the period. 
E)  The assets and liabilities of a company but not the owner's equity.

Question 9

The question of when revenue should be recognized on the income statement (according to GAAP) is addressed by the:

Accepted Answer

A)  Revenue recognition principle. 
B)  Going-concern assumption. 
C)  Objectivity principle. 
D)  Business entity assumption. 
E)  Cost principle. 
A)  Revenue recognition principle. 
B)  Going-concern assumption. 
C)  Objectivity principle. 
D)  Business entity assumption. 
E)  Cost principle.

Question 10

Identify the international group establishing accounting principles.

Accepted Answer

The International Accounting S

Question 11

The private group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Accepted Answer

A)  APB. 
B)  FASB. 
C)  AAA. 
D)  AICPA. 
E)  SEC. 
A)  APB. 
B)  FASB. 
C)  AAA. 
D)  AICPA. 
E)  SEC.

Question 12

Opportunities in accounting include auditing, consulting, market research, and tax planning.

Accepted Answer

A) True 
 B)False

Question 13

Identify each of the following business activities 1 through 6 into the appropriate category a, b, and c.

Accepted Answer

The answer of Identify each of the following business activities...

Question 14

An external transaction is an exchange of value within an organization.

Accepted Answer

A) True 
 B)False

Question 15

Revenues are:

Accepted Answer

A)  The same as net income. 
B)  The excess of expenses over assets. 
C)  Resources owned or controlled by a company. 
D)  The increase in equity from a company's earning activities. 
E)  The costs of assets or services used. 
A)  The same as net income. 
B)  The excess of expenses over assets. 
C)  Resources owned or controlled by a company. 
D)  The increase in equity from a company's earning activities. 
E)  The costs of assets or services used.

Question 16

Risk is the _________________ about the return an investor expects to earn.

Accepted Answer

The answer of Risk is the _________________ about the return...

Question 17

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 18

Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Accepted Answer

A)  Assets increase by $75,000 and expenses increase by $75,000. 
B)  Assets increase by $75,000 and expenses decrease by $75,000. 
C)  Liabilities increase by $75,000 and expenses decrease by $75,000. 
D)  Assets decrease by $75,000 and expenses decrease by $75,000. 
E)  Assets increase by $75,000 and liabilities increase by $75,000. 
A)  Assets increase by $75,000 and expenses increase by $75,000. 
B)  Assets increase by $75,000 and expenses decrease by $75,000. 
C)  Liabilities increase by $75,000 and expenses decrease by $75,000. 
D)  Assets decrease by $75,000 and expenses decrease by $75,000. 
E)  Assets increase by $75,000 and liabilities increase by $75,000.

Question 19

Return on assets is often stated in ratio form as the amount of average total assets divided by income.

Accepted Answer

A) True 
 B)False

Question 20

An accounting information system communicates data to help businesses make better decisions.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

The monetary unit assumption means that all international transactions must be expressed in dollars.

Planning activities are the means an organization uses to pay for resources like land, buildings, and equipment to carry out its plans.

The term __________________ refers to a liability that promises a future outflow of resources.

The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that the building was easily worth $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Maxim to record the building on its records at $500,000?

The ____________________ describes a company's revenues and expenses over a period of time due to earnings activities.

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

A balance sheet or a statement of financial position lists:

The question of when revenue should be recognized on the income statement (according to GAAP) is addressed by the:

Identify the international group establishing accounting principles.

The private group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Opportunities in accounting include auditing, consulting, market research, and tax planning.

Identify each of the following business activities 1 through 6 into the appropriate category a, b, and c.

An external transaction is an exchange of value within an organization.

Revenues are:

Risk is the _________________ about the return an investor expects to earn.

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Return on assets is often stated in ratio form as the amount of average total assets divided by income.

An accounting information system communicates data to help businesses make better decisions.

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

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