Question 1

Owner's equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

Accepted Answer

A) True 
 B)False

Question 2

The three major types of business activities are operating, financing, and investing.

Accepted Answer

A) True 
 B)False

Question 3

A disadvantage of a sole proprietorship is the fact that the owner has __________________.

Accepted Answer

The answer of A disadvantage of a sole proprietorship is...

Question 4

FastForward has the following beginning cash balance and cash transactions for the month of January. Using this information prepare a statement of cash flows.

Accepted Answer

The answer of FastForward has the following beginning cash balance...

Question 5

The excess of expenses over revenues for a period is:

Accepted Answer

A)  Net assets. 
B)  Equity. 
C)  Net loss. 
D)  Net income. 
E)  A liability. 
A)  Net assets. 
B)  Equity. 
C)  Net loss. 
D)  Net income. 
E)  A liability.

Question 6

Identify the three basic forms of business organizations.

Accepted Answer

The three basic forms of busin

Question 7

Operating activities include long-term borrowing and repaying cash from lenders, and cash investments or withdrawals by the owner.

Accepted Answer

A) True 
 B)False

Question 8

Nick's had income of $350 million and average invested assets of $2,000 million. Its ROA is:

Accepted Answer

A)  1.8%. 
B)  35%. 
C)  17.5%. 
D)  5.7%. 
E)  3.5%. 
A)  1.8%. 
B)  35%. 
C)  17.5%. 
D)  5.7%. 
E)  3.5%.

Question 9

The International Accounting Standards Board (IASB) is an independent group which issues International Financial Reporting Standards (IFRS).

Accepted Answer

A) True 
 B)False

Question 10

Hal Burton began a Web Consulting practice and completed these transactions during September of the current year:
Show the effects of the above transactions on the accounting equation of Halley Burton, Consultant. Use the following format for your answers. The first item is shown as an example.
Increase = I Decrease = D No effect = N

Accepted Answer

The answer of Hal Burton began a Web Consulting practice...

Question 11

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

Accepted Answer

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

Question 12

The accounting concept that requires financial statement information to be supported by independent, unbiased evidence other than someone's belief or opinion is:

Accepted Answer

A)  Business entity assumption. 
B)  Monetary unit assumption. 
C)  Going-concern assumption. 
D)  Time-period assumption. 
E)  Objectivity. 
A)  Business entity assumption. 
B)  Monetary unit assumption. 
C)  Going-concern assumption. 
D)  Time-period assumption. 
E)  Objectivity.

Question 13

What is the purpose of return on assets as an analytical tool?

Accepted Answer

Return on assets is useful in

Question 14

Prepare a December 31 balance sheet in proper form for Surety Insurance using the following accounts and amounts:

Accepted Answer

The answer of Prepare a December 31 balance sheet in...

Question 15

Objectivity means that financial information is supported by independent unbiased evidence.

Accepted Answer

A) True 
 B)False

Question 16

The difference between a company's assets and its liabilities, or net assets is:

Accepted Answer

A)  Net income. 
B)  Expense. 
C)  Equity. 
D)  Revenue. 
E)  Net loss. 
A)  Net income. 
B)  Expense. 
C)  Equity. 
D)  Revenue. 
E)  Net loss.

Question 17

Managerial accounting is the area of accounting that provides internal reports to assist the decision making needs of internal users.

Accepted Answer

A) True 
 B)False

Question 18

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Accepted Answer

A) True 
 B)False

Question 19

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

Accepted Answer

A)  Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase. 
B)  Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect. 
C)  Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect. 
D)  Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase. 
E)  Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease. 
A)  Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase. 
B)  Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect. 
C)  Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect. 
D)  Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase. 
E)  Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.

Question 20

A partnership is a business owned by two or more people.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

Owner's equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

The three major types of business activities are operating, financing, and investing.

A disadvantage of a sole proprietorship is the fact that the owner has __________________.

FastForward has the following beginning cash balance and cash transactions for the month of January. Using this information prepare a statement of cash flows.

The excess of expenses over revenues for a period is:

Identify the three basic forms of business organizations.

Operating activities include long-term borrowing and repaying cash from lenders, and cash investments or withdrawals by the owner.

Nick's had income of $350 million and average invested assets of $2,000 million. Its ROA is:

The International Accounting Standards Board (IASB) is an independent group which issues International Financial Reporting Standards (IFRS).

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

The accounting concept that requires financial statement information to be supported by independent, unbiased evidence other than someone's belief or opinion is:

What is the purpose of return on assets as an analytical tool?

Prepare a December 31 balance sheet in proper form for Surety Insurance using the following accounts and amounts:

Objectivity means that financial information is supported by independent unbiased evidence.

The difference between a company's assets and its liabilities, or net assets is:

Managerial accounting is the area of accounting that provides internal reports to assist the decision making needs of internal users.

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

A partnership is a business owned by two or more people.

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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