Question 1

Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long-used accounting practice.

Accepted Answer

A) True 
 B)False

Question 2

The group that attempts to create more harmony among the accounting practices of different countries is the:

Accepted Answer

A)  AICPA. 
B)  IASB. 
C)  CAP. 
D)  SEC. 
E)  FASB. 
A)  AICPA. 
B)  IASB. 
C)  CAP. 
D)  SEC. 
E)  FASB.

Question 3

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:

Accepted Answer

A)  $40,500 increase. 
B)  $40,500 decrease. 
C)  $134,500 decrease. 
D)  $134,000 increase. 
E)  $9,500 increase. 
A)  $40,500 increase. 
B)  $40,500 decrease. 
C)  $134,500 decrease. 
D)  $134,000 increase. 
E)  $9,500 increase.

Question 4

Match the following definitions with terms 1 through 8. Place the letter that identifies the best definition in the blank space next to the term.

Accepted Answer

The answer of Match the following definitions with terms 1...

Question 5

________________ activities are the means organizations use to pay for resources such as land, building, and equipment.

Accepted Answer

The answer of ________________ activities are the means organizations use...

Question 6

Assets removed from the business by the business owner for personal use are called ___________.

Accepted Answer

The answer of Assets removed from the business by the...

Question 7

Risk is the uncertainty about the return we expect to earn.

Accepted Answer

A) True 
 B)False

Question 8

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.

Accepted Answer

A)  $61,000 increase. 
B)  $37,000 increase. 
C)  $7,000 decrease. 
D)  $7,000 increase. 
E)  $34,000 decrease. 
A)  $61,000 increase. 
B)  $37,000 increase. 
C)  $7,000 decrease. 
D)  $7,000 increase. 
E)  $34,000 decrease.

Question 9

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 10

The first section of the income statement reports cash flows from operating activities.

Accepted Answer

A) True 
 B)False

Question 11

_________ are beliefs that separate right from wrong.

Accepted Answer

The answer of _________ are beliefs that separate right from...

Question 12

In the partnership form of business, the owners are called shareholders.

Accepted Answer

A) True 
 B)False

Question 13

External users of accounting information include all of the following except:

Accepted Answer

A)  Shareholders. 
B)  Customers. 
C)  Purchasing managers. 
D)  Government regulators. 
E)  Creditors. 
A)  Shareholders. 
B)  Customers. 
C)  Purchasing managers. 
D)  Government regulators. 
E)  Creditors.

Question 14

A balance sheet covers a period of time such as a month or year.

Accepted Answer

A) True 
 B)False

Question 15

A common characteristic of __________ is their ability to provide expected future benefits to a business.

Accepted Answer

The answer of A common characteristic of __________ is their...

Question 16

The accounting equation can be restated as: Assets - Equity = Liabilities.

Accepted Answer

A) True 
 B)False

Question 17

On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?

Accepted Answer

A)  $8,300 
B)  $13,050 
C)  $20,500 
D)  $31,100 
E)  $40,400 
A)  $8,300 
B)  $13,050 
C)  $20,500 
D)  $31,100 
E)  $40,400

Question 18

If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity?

Accepted Answer

A)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000. 
B)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000. 
C)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity would not change. 
D)  There would be no effect on the accounts because the accounts are affected by the same amount. 
E)  None of these. 
A)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000. 
B)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000. 
C)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity would not change. 
D)  There would be no effect on the accounts because the accounts are affected by the same amount. 
E)  None of these.

Question 19

Reston had income of $150 million and average invested assets of $1,800 million. Its return on assets is:

Accepted Answer

A)  8.3%. 
B)  83.3%. 
C)  12%. 
D)  120%. 
E)  16.7%. 
A)  8.3%. 
B)  83.3%. 
C)  12%. 
D)  120%. 
E)  16.7%.

Question 20

Distributions of assets by a business to its owners are called:

Accepted Answer

A)  Withdrawals. 
B)  Expenses. 
C)  Assets. 
D)  Retained earnings. 
E)  Net Income. 
A)  Withdrawals. 
B)  Expenses. 
C)  Assets. 
D)  Retained earnings. 
E)  Net Income.

Exam 1: Accounting in Business

Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long-used accounting practice.

The group that attempts to create more harmony among the accounting practices of different countries is the:

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:

Match the following definitions with terms 1 through 8. Place the letter that identifies the best definition in the blank space next to the term.

________________ activities are the means organizations use to pay for resources such as land, building, and equipment.

Assets removed from the business by the business owner for personal use are called ___________.

Risk is the uncertainty about the return we expect to earn.

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

The first section of the income statement reports cash flows from operating activities.

_________ are beliefs that separate right from wrong.

In the partnership form of business, the owners are called shareholders.

External users of accounting information include all of the following except:

A balance sheet covers a period of time such as a month or year.

A common characteristic of __________ is their ability to provide expected future benefits to a business.

The accounting equation can be restated as: Assets - Equity = Liabilities.

On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?

If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity?

Reston had income of $150 million and average invested assets of $1,800 million. Its return on assets is:

Distributions of assets by a business to its owners are called:

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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