Question 1

If equity is $300,000 and liabilities are $192,000, then assets equal:

Accepted Answer

A)  $108,000. 
B)  $192,000. 
C)  $300,000. 
D)  $492,000. 
E)  $792,000. 
A)  $108,000. 
B)  $192,000. 
C)  $300,000. 
D)  $492,000. 
E)  $792,000.

Question 2

On December 15 of the current year, Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in the following year. Which accounting principle would require Myers Legal Services to record the legal fees revenue in the following year and not the year the cash was received?

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 3

____________ are the increases in equity from a company's earnings activities

Accepted Answer

The answer of ____________ are the increases in equity from...

Question 4

Resources that are expected to yield future benefits are:

Accepted Answer

A)  Assets. 
B)  Revenues. 
C)  Liabilities. 
D)  Owner's Equity. 
E)  Expenses. 
A)  Assets. 
B)  Revenues. 
C)  Liabilities. 
D)  Owner's Equity. 
E)  Expenses.

Question 5

If a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000. What is the effect of the sale on the accounting equation for the seller?

Accepted Answer

A)  Assets increase $52,000; owner's equity increases $52,000. 
B)  Assets increase $85,000; owner's equity increases $85,000. 
C)  Assets increase $137,000; owner's equity increases $137,000. 
D)  Assets increase $140,000; owner's equity increases $140,000. 
E)  Assets decrease $85,000; owner's equity decreases $85,000. 
A)  Assets increase $52,000; owner's equity increases $52,000. 
B)  Assets increase $85,000; owner's equity increases $85,000. 
C)  Assets increase $137,000; owner's equity increases $137,000. 
D)  Assets increase $140,000; owner's equity increases $140,000. 
E)  Assets decrease $85,000; owner's equity decreases $85,000.

Question 6

Every business transaction leaves the accounting equation in balance.

Accepted Answer

A) True 
 B)False

Question 7

Return on assets is also known as return on investment.

Accepted Answer

A) True 
 B)False

Question 8

If a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000. At the time of the sale, assume that the seller still owed $30,000 to TrustOne Bank on the land that was purchased for $85,000. Immediately after the sale, the seller paid off the loan to TrustOne Bank. What is the effect of the sale and the payoff of the loan on the accounting equation?

Accepted Answer

A)  Assets increase $52,000; owner's equity increases $22,000; liabilities decrease $30,000 
B)  Assets increase $52,000; owner's equity increases $30,000; liabilities decrease $30,000 
C)  Assets increase $22,000; owner's equity increases $52,000; liabilities decrease $30,000 
D)  Assets decrease $30,000; owner's equity decreases $30,000; liabilities decrease $30,000 
E)  Assets decrease $55,000; owner's equity decreases $55,000; liabilities decrease $30,000 
A)  Assets increase $52,000; owner's equity increases $22,000; liabilities decrease $30,000 
B)  Assets increase $52,000; owner's equity increases $30,000; liabilities decrease $30,000 
C)  Assets increase $22,000; owner's equity increases $52,000; liabilities decrease $30,000 
D)  Assets decrease $30,000; owner's equity decreases $30,000; liabilities decrease $30,000 
E)  Assets decrease $55,000; owner's equity decreases $55,000; liabilities decrease $30,000

Question 9

Determine the net income of a company for which the following information is available for the month of May.

Accepted Answer

A)  $190,000. 
B)  $210,000. 
C)  $230,000. 
D)  $400,000. 
E)  $610,000. 
A)  $190,000. 
B)  $210,000. 
C)  $230,000. 
D)  $400,000. 
E)  $610,000.

Question 10

An example of an investing activity is:

Accepted Answer

A)  Paying wages of employees. 
B)  Withdrawals by the owner. 
C)  Purchase of land. 
D)  Selling inventory. 
E)  Contribution from owner. 
A)  Paying wages of employees. 
B)  Withdrawals by the owner. 
C)  Purchase of land. 
D)  Selling inventory. 
E)  Contribution from owner.

Question 11

Social responsibility:

Accepted Answer

A)  Is a concern for the impact of our actions on society. 
B)  Is a code that helps in dealing with confidential information. 
C)  Is required by the SEC. 
D)  Requires that all businesses conduct social audits. 
E)  Is limited to large companies. 
A)  Is a concern for the impact of our actions on society. 
B)  Is a code that helps in dealing with confidential information. 
C)  Is required by the SEC. 
D)  Requires that all businesses conduct social audits. 
E)  Is limited to large companies.

Question 12

A partnership:

Accepted Answer

A)  Is also called a sole proprietorship. 
B)  Has unlimited liability for its partners. 
C)  Has to have a written agreement in order to be legal. 
D)  Is a legal organization separate from its owners. 
E)  Has owners called shareholders. 
A)  Is also called a sole proprietorship. 
B)  Has unlimited liability for its partners. 
C)  Has to have a written agreement in order to be legal. 
D)  Is a legal organization separate from its owners. 
E)  Has owners called shareholders.

Question 13

Assets created by selling goods and services on credit are:

Accepted Answer

A)  Accounts payable. 
B)  Accounts receivable. 
C)  Liabilities. 
D)  Expenses. 
E)  Equity. 
A)  Accounts payable. 
B)  Accounts receivable. 
C)  Liabilities. 
D)  Expenses. 
E)  Equity.

Question 14

The income statement reports on operating activities at a point in time.

Accepted Answer

A) True 
 B)False

Question 15

Identify several opportunities in accounting and its related fields.

Accepted Answer

The traditional areas of accounting incl

Question 16

______________ is the area of accounting aimed at serving external users.

Accepted Answer

Financial

Question 17

Quick Computer Service had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Accepted Answer

A)  7.1% 
B)  7.5% 
C)  6.7% 
D)  20.0% 
E)  18.8% 
A)  7.1% 
B)  7.5% 
C)  6.7% 
D)  20.0% 
E)  18.8%

Question 18

The records of Skymaster Airplane Rentals show the following information as of December 31. Skymaster withdrew $52,000 during the year for personal expenses. Prepare a December income statement, a December statement of changes in equity, and a December 30 balance sheet.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& SKYMASTER AIRPLANE

Question 19

All of the following regarding a Certified Public Accountant are except:

Accepted Answer

A)  Must meet education and experience requirements. 
B)  Must pass an examination. 
C)  Must exhibit ethical character. 
D)  May also be a Certified Management Accountant. 
E)  Cannot hold any certificate other than a CPA. 
A)  Must meet education and experience requirements. 
B)  Must pass an examination. 
C)  Must exhibit ethical character. 
D)  May also be a Certified Management Accountant. 
E)  Cannot hold any certificate other than a CPA.

Question 20

Good ethics are good business.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

If equity is $300,000 and liabilities are $192,000, then assets equal:

____________ are the increases in equity from a company's earnings activities

Resources that are expected to yield future benefits are:

If a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000. What is the effect of the sale on the accounting equation for the seller?

Every business transaction leaves the accounting equation in balance.

Return on assets is also known as return on investment.

Determine the net income of a company for which the following information is available for the month of May.

An example of an investing activity is:

Social responsibility:

A partnership:

Assets created by selling goods and services on credit are:

The income statement reports on operating activities at a point in time.

Identify several opportunities in accounting and its related fields.

______________ is the area of accounting aimed at serving external users.

Quick Computer Service had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

The records of Skymaster Airplane Rentals show the following information as of December 31. Skymaster withdrew $52,000 during the year for personal expenses. Prepare a December income statement, a December statement of changes in equity, and a December 30 balance sheet.

All of the following regarding a Certified Public Accountant are except:

Good ethics are good business.

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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