Question 1

Creditors' claims on assets that reflect company obligations to provide assets,products,or services to others are called ____________________.

Accepted Answer

liabilities

Question 2

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000;Supplies,$600;Equipment,$10,000;Accounts Payable,$8,500.What is the amount of owner's equity as of August 31 of the current year?

Accepted Answer

A) $49,100 
B) $32,100 
C) $12,100 
D) $10,900 
E) $30,900 
A) $49,100 
B) $32,100 
C) $12,100 
D) $10,900 
E) $30,900 B

Question 3

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located.How does this transaction affect the accounting equation for Grandmark?

Accepted Answer

A) Assets would decrease $2,000 and liabilities would decrease $2,000. 
B) Assets would decrease $2,000 and equity would decrease $2,000. 
C) Assets would increase $2,000 and equity would increase $2,000. 
D) Assets would increase $2,000 and liabilities would increase $2,000. 
E) Liabilities would decrease $2,000 and equity would increase $2,000. 
A) Assets would decrease $2,000 and liabilities would decrease $2,000. 
B) Assets would decrease $2,000 and equity would decrease $2,000. 
C) Assets would increase $2,000 and equity would increase $2,000. 
D) Assets would increase $2,000 and liabilities would increase $2,000. 
E) Liabilities would decrease $2,000 and equity would increase $2,000. B

Question 4

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

Accepted Answer

A) True 
 B)False

Question 5

The _______________ principle requires that financial information is supported by independent,unbiased evidence.

Accepted Answer

The answer of The _______________ principle requires that financial information...

Question 6

Prepare a April 30 balance sheet in proper form for Two Rivers Vending Service from the following alphabetical list of the accounts at April 30:

Accepted Answer

The answer of Prepare a April 30 balance sheet in...

Question 7

On May 31 of the current year,the assets and liabilities of Riser,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 May 31 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 8

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

Accepted Answer

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

Question 9

If a company uses $1,300 of its cash to purchase supplies,the effect on the accounting equation would be:

Accepted Answer

A) Assets increase $1,300 and liabilities decrease $1,300. 
B) One asset increases $1,300 and another asset decreases $1,300,causing no effect. 
C) Assets decrease $1,300 and equity decreases $1,300. 
D) Assets decrease $1,300 and equity increases $1,300. 
E) Assets increase $1,300 and liabilities increase $1,300. 
A) Assets increase $1,300 and liabilities decrease $1,300. 
B) One asset increases $1,300 and another asset decreases $1,300,causing no effect. 
C) Assets decrease $1,300 and equity decreases $1,300. 
D) Assets decrease $1,300 and equity increases $1,300. 
E) Assets increase $1,300 and liabilities increase $1,300.

Question 10

The accounting equation is ______________________________.

Accepted Answer

Assets = L

Question 11

Creditors' claims on the assets of a company are called:

Accepted Answer

A) Net losses. 
B) Expenses. 
C) Revenues. 
D) Equity. 
E) Liabilities. 
A) Net losses. 
B) Expenses. 
C) Revenues. 
D) Equity. 
E) Liabilities.

Question 12

Revenue is properly recognized:

Accepted Answer

A) When the customer makes an order. 
B) Only if the transaction creates an account receivable. 
C) At the end of the accounting period. 
D) Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price. 
E) When cash from a sale is received. 
A) When the customer makes an order. 
B) Only if the transaction creates an account receivable. 
C) At the end of the accounting period. 
D) Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price. 
E) When cash from a sale is received.

Question 13

The accounting equation implies that: Assets + Liabilities = Equity.

Accepted Answer

A) True 
 B)False

Question 14

Verity Siding Company,owned by S.Verity,began operations in May and completed the following transactions during that first month of operations.Show the effects of the transactions on the accounts of the accounting equation by recording increases and decreases in the appropriate columns in the table below.Do not determine new account balances after each transaction.Determine the final total for each account and verify that the equation is in balance.

Accepted Answer

The answer of Verity Siding Company,owned by S.Verity,began operations in...

Question 15

General accounting principles arise from long-used accounting practices.

Accepted Answer

A) True 
 B)False

Question 16

The conceptual framework that the Financial Accounting Standards Board (FASB)and the International Accounting Standards Board (IASB)are attempting to converge and enhance includes the following broad areas to guide standard setting except:

Accepted Answer

A) Objectives 
B) Qualitative characteristics 
C) Uniformity 
D) Elements 
E) Recognition and measurement 
A) Objectives 
B) Qualitative characteristics 
C) Uniformity 
D) Elements 
E) Recognition and measurement

Question 17

Ethical behavior requires that:

Accepted Answer

A) Auditors' pay not depend on the success of the client's business. 
B) Auditors invest in businesses they audit. 
C) Analysts report information favorable to their companies. 
D) Managers use accounting information to benefit themselves. 
E) Auditors' pay depends on the success of the client's business. 
A) Auditors' pay not depend on the success of the client's business. 
B) Auditors invest in businesses they audit. 
C) Analysts report information favorable to their companies. 
D) Managers use accounting information to benefit themselves. 
E) Auditors' pay depends on the success of the client's business.

Question 18

Which of the following accounts is not included in the calculation of a company's ending owner's equity?

Accepted Answer

A) Revenues. 
B) Expenses. 
C) Withdrawals. 
D) Owner investments. 
E) Cash. 
A) Revenues. 
B) Expenses. 
C) Withdrawals. 
D) Owner investments. 
E) Cash.

Question 19

From the information given below,prepare a November income statement,a November statement of owner's equity,and a November 30 balance sheet.On November 1 of the current year,Victoria Garza began Garza Décor with an initial investment of $50,000 cash.On November 30,her records showed the following (alphabetically arranged)items and amounts.

Accepted Answer

The answer of From the information given below,prepare a November...

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

Creditors' claims on assets that reflect company obligations to provide assets,products,or services to others are called ____________________.

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000;Supplies,$600;Equipment,$10,000;Accounts Payable,$8,500.What is the amount of owner's equity as of August 31 of the current year?

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located.How does this transaction affect the accounting equation for Grandmark?

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

The _______________ principle requires that financial information is supported by independent,unbiased evidence.

Prepare a April 30 balance sheet in proper form for Two Rivers Vending Service from the following alphabetical list of the accounts at April 30:

On May 31 of the current year,the assets and liabilities of Riser,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 May 31 of the current year?

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

If a company uses $1,300 of its cash to purchase supplies,the effect on the accounting equation would be:

The accounting equation is ______________________________.

Creditors' claims on the assets of a company are called:

Revenue is properly recognized:

The accounting equation implies that: Assets + Liabilities = Equity.

General accounting principles arise from long-used accounting practices.

The conceptual framework that the Financial Accounting Standards Board (FASB)and the International Accounting Standards Board (IASB)are attempting to converge and enhance includes the following broad areas to guide standard setting except:

Ethical behavior requires that:

Which of the following accounts is not included in the calculation of a company's ending owner's equity?

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

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

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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