Question 1

________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

Accepted Answer

The answer of ________________ activities involve the acquisition and disposal...

Question 2

Describe the relation between revenues, expenses, and net income.

Accepted Answer

Revenues are the increases in

Question 3

The statement of cash flows reports all of the following except:

Accepted Answer

A)  Cash flows from operating activities. 
B)  Cash flows from investing activities. 
C)  Cash flows from financing activities. 
D)  The net increase or decrease in assets for the period reported. 
E)  The net increase or decrease in cash for the period reported. 
A)  Cash flows from operating activities. 
B)  Cash flows from investing activities. 
C)  Cash flows from financing activities. 
D)  The net increase or decrease in assets for the period reported. 
E)  The net increase or decrease in cash for the period reported.

Question 4

Select the appropriate financial statement for each of the following items.
(Note: some items may appear on more than one financial statement.)

Accepted Answer

The answer of Select the appropriate financial statement for each...

Question 5

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Accepted Answer

A)  Going-concern assumption. 
B)  Matching principle. 
C)  Cost principle. 
D)  Business entity assumption. 
E)  Consideration assumption. 
A)  Going-concern assumption. 
B)  Matching principle. 
C)  Cost principle. 
D)  Business entity assumption. 
E)  Consideration assumption.

Question 6

Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

Accepted Answer

A)  Going-concern assumption. 
B)  Matching principle. 
C)  Cost principle. 
D)  Business entity assumption. 
E)  Consideration assumption. 
A)  Going-concern assumption. 
B)  Matching principle. 
C)  Cost principle. 
D)  Business entity assumption. 
E)  Consideration assumption.

Question 7

Assets are the resources of a company and are expected to yield future benefits.

Accepted Answer

A) True 
 B)False

Question 8

The International Accounting Standards Board (IASB)

Accepted Answer

A)  Hopes to create harmony among accounting practices of different countries. 
B)  Is the government group that establishes reporting requirements for companies that issue shares to the public. 
C)  Has the authority to impose its standards on companies. 
D)  Is the only source of generally accepted accounting principles (GAAP). 
E)  Only applies to companies that are members of the European Union. 
A)  Hopes to create harmony among accounting practices of different countries. 
B)  Is the government group that establishes reporting requirements for companies that issue shares to the public. 
C)  Has the authority to impose its standards on companies. 
D)  Is the only source of generally accepted accounting principles (GAAP). 
E)  Only applies to companies that are members of the European Union.

Question 9

A corporation:

Accepted Answer

A)  Is a business legally separate from its owners. 
B)  Is controlled by the IASB. 
C)  Has shareholders who have unlimited liability for the acts of the corporation. 
D)  Is the same as a limited liability partnership. 
E)  Is not subject to double taxation. 
A)  Is a business legally separate from its owners. 
B)  Is controlled by the IASB. 
C)  Has shareholders who have unlimited liability for the acts of the corporation. 
D)  Is the same as a limited liability partnership. 
E)  Is not subject to double taxation.

Question 10

The area of accounting aimed at serving the decision making needs of internal users is:

Accepted Answer

A)  Financial accounting. 
B)  Managerial accounting. 
C)  External auditing. 
D)  SEC reporting. 
E)  Bookkeeping. 
A)  Financial accounting. 
B)  Managerial accounting. 
C)  External auditing. 
D)  SEC reporting. 
E)  Bookkeeping.

Question 11

If assets are $365,000 and equity is $120,000, then liabilities are:

Accepted Answer

A)  $120,000. 
B)  $245,000. 
C)  $365,000. 
D)  $485,000. 
E)  $610,000. 
A)  $120,000. 
B)  $245,000. 
C)  $365,000. 
D)  $485,000. 
E)  $610,000.

Question 12

Revenues are increases in equity from a company's earning activities.

Accepted Answer

A) True 
 B)False

Question 13

The income statement reports all of the following except:

Accepted Answer

A)  Revenues earned by a business. 
B)  Expenses incurred by a business. 
C)  Assets owned by a business. 
D)  Net income or loss earned by a business. 
E)  The time period over which the earnings occurred. 
A)  Revenues earned by a business. 
B)  Expenses incurred by a business. 
C)  Assets owned by a business. 
D)  Net income or loss earned by a business. 
E)  The time period over which the earnings occurred.

Question 14

The income statement shows the financial position of a business on a specific date.

Accepted Answer

A) True 
 B)False

Question 15

The ________________ assumption states that transactions and events are expressed in money units.

Accepted Answer

The answer of The ________________ assumption states that transactions and...

Question 16

How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?

Accepted Answer

A)  +$10,000 accounts receivable, -$10,000 accounts payable. 
B)  +$10,000 accounts receivable, +$10,000 accounts payable. 
C)  +$10,000 accounts receivable, +$10,000 cash. 
D)  +$10,000 accounts receivable, +$10,000 revenue. 
E)  +$10,000 accounts receivable, -$10,000 revenue. 
A)  +$10,000 accounts receivable, -$10,000 accounts payable. 
B)  +$10,000 accounts receivable, +$10,000 accounts payable. 
C)  +$10,000 accounts receivable, +$10,000 cash. 
D)  +$10,000 accounts receivable, +$10,000 revenue. 
E)  +$10,000 accounts receivable, -$10,000 revenue.

Question 17

The business entity principle means that a business will continue operating for an indefinite period of time.

Accepted Answer

A) True 
 B)False

Question 18

The characteristics below apply to at least one of the forms of business organization.
a. Is a separate legal entity.
b. Is allowed to be owned by one person only.
c. Owner or owners are personally liable for debts of the business.
d. Is a taxable entity.
e. Is a business entity.
f. May have a contract specifying the division of profits among the owners.
g. Has an unlimited life
Use the following format to indicate (with a "yes" or "no") whether or not a characteristic applies to each type of business organization.

Accepted Answer

The answer of The characteristics below apply to at least...

Question 19

The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash, and (3) measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services, is called the:

Accepted Answer

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

Question 20

Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is:

Accepted Answer

A)  $223,000. 
B)  $240,000. 
C)  $268,000. 
D)  $274,000. 
E)  $208,000. 
A)  $223,000. 
B)  $240,000. 
C)  $268,000. 
D)  $274,000. 
E)  $208,000.

Exam 1: Accounting in Business

________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

Describe the relation between revenues, expenses, and net income.

The statement of cash flows reports all of the following except:

Select the appropriate financial statement for each of the following items. (Note: some items may appear on more than one financial statement.)

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

Assets are the resources of a company and are expected to yield future benefits.

The International Accounting Standards Board (IASB)

A corporation:

The area of accounting aimed at serving the decision making needs of internal users is:

If assets are $365,000 and equity is $120,000, then liabilities are:

Revenues are increases in equity from a company's earning activities.

The income statement reports all of the following except:

The income statement shows the financial position of a business on a specific date.

The ________________ assumption states that transactions and events are expressed in money units.

How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?

The business entity principle means that a business will continue operating for an indefinite period of time.

Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is:

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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