Question 1

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Accepted Answer

A) $45,000. 
B) $92,000. 
C) $98,000. 
D) $210,000. 
E) $282,000. 
A) $45,000. 
B) $92,000. 
C) $98,000. 
D) $210,000. 
E) $282,000.

Question 4

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 5

The accounting concept that requires financial statement information to be supported by independent,unbiased evidence is:

Accepted Answer

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

Question 6

There are three major types of business activities.________________ activities are the means organizations use to pay for resources such as land,building,and equipment to carry out plans.

Accepted Answer

The answer of There are three major types of business...

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A limited partnership:

Accepted Answer

A) Includes a general partner with unlimited liability. 
B) Is subject to double taxation. 
C) Has owners called stockholders. 
D) Is the same as a corporation. 
E) May only have two partners. 
A) Includes a general partner with unlimited liability. 
B) Is subject to double taxation. 
C) Has owners called stockholders. 
D) Is the same as a corporation. 
E) May only have two partners.

Question 9

Billington Corp.borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

Accepted Answer

A) Assets would decrease $80,000 and liabilities would decrease $80,000. 
B) Assets would decrease $80,000 and equity would increase $80,000. 
C) Assets would increase $80,000 and equity would decrease $80,000. 
D) Assets would increase $80,000 and liabilities would increase $80,000. 
E) Liabilities would decrease $80,000 and equity would increase $80,000. 
A) Assets would decrease $80,000 and liabilities would decrease $80,000. 
B) Assets would decrease $80,000 and equity would increase $80,000. 
C) Assets would increase $80,000 and equity would decrease $80,000. 
D) Assets would increase $80,000 and liabilities would increase $80,000. 
E) Liabilities would decrease $80,000 and equity would increase $80,000.

Question 10

Bookkeeping is the recording of transactions and events and is only part of accounting.

Accepted Answer

A) True 
 B)False

Question 11

______________ is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

Accepted Answer

Financial

Question 12

The statement of cash flows identifies cash flows separated into operating,investing,and financing activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 13

Risk is:

Accepted Answer

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

Question 14

Net Income:

Accepted Answer

A) Decreases equity. 
B) Represents the amount of assets owners put into a business. 
C) Equals assets minus liabilities. 
D) Is the excess of revenues over expenses. 
E) Represents owners' claims against assets. 
A) Decreases equity. 
B) Represents the amount of assets owners put into a business. 
C) Equals assets minus liabilities. 
D) Is the excess of revenues over expenses. 
E) Represents owners' claims against assets.

Question 15

______________________,which is one part of accounting,is the recording of transactions and events,either manually or electronically.

Accepted Answer

Record-kee

Question 16

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

Accepted Answer

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

Question 17

Another name for equity is:

Accepted Answer

A) Net income. 
B) Expenses. 
C) Net assets. 
D) Revenue. 
E) Net loss. 
A) Net income. 
B) Expenses. 
C) Net assets. 
D) Revenue. 
E) Net loss.

Question 18

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 19

Alpha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Accepted Answer

A) Assets increase by $75,000 and expenses increase by $75,000. 
B) Assets increase by $75,000 and expenses decrease by $75,000. 
C) Liabilities increase by $75,000 and expenses decrease by $75,000. 
D) Assets decrease by $75,000 and expenses decrease by $75,000. 
E) Assets increase by $75,000 and liabilities increase by $75,000. 
A) Assets increase by $75,000 and expenses increase by $75,000. 
B) Assets increase by $75,000 and expenses decrease by $75,000. 
C) Liabilities increase by $75,000 and expenses decrease by $75,000. 
D) Assets decrease by $75,000 and expenses decrease by $75,000. 
E) Assets increase by $75,000 and liabilities increase by $75,000.

Question 20

A balance sheet lists:

Accepted Answer

A) The types and amounts of the revenues and expenses of a business. 
B) Only the information about what happened to equity during a time period. 
C) The types and amounts of assets,liabilities,and equity of a business as of a specific date. 
D) The inflows and outflows of cash during the period. 
E) The assets and liabilities of a company but not the owner's equity. 
A) The types and amounts of the revenues and expenses of a business. 
B) Only the information about what happened to equity during a time period. 
C) The types and amounts of assets,liabilities,and equity of a business as of a specific date. 
D) The inflows and outflows of cash during the period. 
E) The assets and liabilities of a company but not the owner's equity.

Exam 1: Accounting in Business

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

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

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

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

The accounting concept that requires financial statement information to be supported by independent,unbiased evidence is:

There are three major types of business activities.________________ activities are the means organizations use to pay for resources such as land,building,and equipment to carry out plans.

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

A limited partnership:

Billington Corp.borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

Bookkeeping is the recording of transactions and events and is only part of accounting.

______________ is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

The statement of cash flows identifies cash flows separated into operating,investing,and financing activities over a period of time.

Risk is:

Net Income:

______________________,which is one part of accounting,is the recording of transactions and events,either manually or electronically.

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

Another name for equity is:

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

Alpha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

A balance sheet lists:

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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