Question 1

Owner's investments are increases in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 2

U. S. government bonds are:

Accepted Answer

A)  High-risk and high-return investments. 
B)  Low-risk and low-return investments. 
C)  High-risk and low-return investments. 
D)  Low-risk and high-return investments. 
E)  High risk and no-return investments. 
A)  High-risk and high-return investments. 
B)  Low-risk and low-return investments. 
C)  High-risk and low-return investments. 
D)  Low-risk and high-return investments. 
E)  High risk and no-return investments.

Question 3

General accounting principles arise from long-used accounting practices.

Accepted Answer

A) True 
 B)False

Question 4

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

Accepted Answer

A) True 
 B)False

Question 5

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:

Accepted Answer

A)  Accounting equation. 
B)  Cost principle. 
C)  Going-concern assumption. 
D)  Realization principle. 
E)  Business entity assumption. 
A)  Accounting equation. 
B)  Cost principle. 
C)  Going-concern assumption. 
D)  Realization principle. 
E)  Business entity assumption.

Question 6

Cool Tours had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Accepted Answer

A)  $88,000. 
B)  $25,000. 
C)  $97,000. 
D)  $38,000. 
E)  $47,000. 
A)  $88,000. 
B)  $25,000. 
C)  $97,000. 
D)  $38,000. 
E)  $47,000.

Question 7

Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

Accepted Answer

A) True 
 B)False

Question 8

The International Accounting Standards Board (IASB) is the government group that establishes reporting requirements for companies that issue shares to the public.

Accepted Answer

A) True 
 B)False

Question 9

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Accepted Answer

A) True 
 B)False

Question 10

Creditors claims on assets that reflect obligations to transfer assets are called ____________.

Accepted Answer

The answer of Creditors claims on assets that reflect obligations...

Question 11

Operating activities:

Accepted Answer

A)  Are the means organizations use to pay for resources like land, buildings and equipment. 
B)  Involve using resources to research, develop, purchase, produce, distribute and market products and services. 
C)  Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services. 
D)  Are also called asset management. 
E)  Are also called strategic management. 
A)  Are the means organizations use to pay for resources like land, buildings and equipment. 
B)  Involve using resources to research, develop, purchase, produce, distribute and market products and services. 
C)  Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services. 
D)  Are also called asset management. 
E)  Are also called strategic management.

Question 12

Risk is:

Accepted Answer

A)  Net income divided by average total assets. 
B)  The reward for investment. 
C)  The uncertainty about the expected return to be earned. 
D)  Unrelated to expected return. 
E)  Derived from the idea of getting something back from an investment. 
A)  Net income divided by average total assets. 
B)  The reward for investment. 
C)  The uncertainty about the expected return to be earned. 
D)  Unrelated to expected return. 
E)  Derived from the idea of getting something back from an investment.

Question 13

Explain why ethics are an integral part of accounting.

Accepted Answer

The purpose of accounting is to provide

Question 14

Explain the accounting equation, and define its terms.

Accepted Answer

The accounting equation is stated as: As

Question 15

The financial statement that identifies where a company's cash came from and where it went during the period is the:

Accepted Answer

A)  Statement of financial position. 
B)  Statement of cash flows. 
C)  Balance sheet. 
D)  Income statement. 
E)  Statement of changes in owner's equity. 
A)  Statement of financial position. 
B)  Statement of cash flows. 
C)  Balance sheet. 
D)  Income statement. 
E)  Statement of changes in owner's equity.

Question 16

The International Accounting Standards board (IASB) has the authority to impose its standards on companies around the world.

Accepted Answer

A) True 
 B)False

Question 17

Harris Co. has a net income of $43,000, assets at the beginning of the year are $250,000 and assets at the end of the year are $300,000. Compute its return on assets.

Accepted Answer

A)  8.4% 
B)  17.2% 
C)  14.3% 
D)  15.6% 
E)  1.5% 
A)  8.4% 
B)  17.2% 
C)  14.3% 
D)  15.6% 
E)  1.5%

Question 18

The accountant of Magic Video Games prepared a balance sheet immediately after each transaction was recorded. During September, the first month of operation, the following balance sheets were prepared:
       Required: Describe the nature of each of these five transactions for the month of September.

Accepted Answer

The answer of The accountant of Magic Video Games prepared...

Question 19

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Accepted Answer

A) True 
 B)False

Question 20

How does the going-concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f

Exam 1: Accounting in Business

Owner's investments are increases in equity from a company's earnings activities.

U. S. government bonds are:

General accounting principles arise from long-used accounting practices.

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:

Cool Tours had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

The International Accounting Standards Board (IASB) is the government group that establishes reporting requirements for companies that issue shares to the public.

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Creditors claims on assets that reflect obligations to transfer assets are called ____________.

Operating activities:

Risk is:

Explain why ethics are an integral part of accounting.

Explain the accounting equation, and define its terms.

The financial statement that identifies where a company's cash came from and where it went during the period is the:

The International Accounting Standards board (IASB) has the authority to impose its standards on companies around the world.

Harris Co. has a net income of $43,000, assets at the beginning of the year are $250,000 and assets at the end of the year are $300,000. Compute its return on assets.

The accountant of Magic Video Games prepared a balance sheet immediately after each transaction was recorded. During September, the first month of operation, the following balance sheets were prepared: Required: Describe the nature of each of these five transactions for the month of September.

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

How does the going-concern principle affect reporting asset values of a 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

Filters