Question 1

Savvy Sightseeing 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 2

Return on assets is often stated in ratio form as the amount of average total assets divided by income.

Accepted Answer

A) True 
 B)False

Question 3

The basic financial statements include all of the following except:

Accepted Answer

A) Balance Sheet. 
B) Income Statement. 
C) Statement of Owner's Equity. 
D) Statement of Cash Flows. 
E) Statement of Changes in Assets. 
A) Balance Sheet. 
B) Income Statement. 
C) Statement of Owner's Equity. 
D) Statement of Cash Flows. 
E) Statement of Changes in Assets.

Question 4

A net loss occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 5

If assets are $300,000 and liabilities are $192,000,then equity equals:

Accepted Answer

A) $108,000. 
B) $192,000. 
C) $300,000. 
D) $492,000. 
E) $792,000. 
A) $108,000. 
B) $192,000. 
C) $300,000. 
D) $492,000. 
E) $792,000.

Question 6

In accounting,the rule that requires that assets,services,and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ______________________________.

Accepted Answer

The answer of In accounting,the rule that requires that assets,services,and...

Question 7

The records of Roadmaster Auto Rentals show the following information as of December 31.The owner,Rob Fletcher withdrew $52,000 during the year for personal expenses.Prepare a December income statement,a December statement of owner's equity,and a December 30 balance sheet.

Accepted Answer

The answer of The records of Roadmaster Auto Rentals show...

Question 8

If assets are $99,000 and liabilities are $32,000,then equity equals:

Accepted Answer

A) $32,000. 
B) $67,000. 
C) $99,000. 
D) $131,000. 
E) $198,000. 
A) $32,000. 
B) $67,000. 
C) $99,000. 
D) $131,000. 
E) $198,000.

Question 9

A company's balance sheet shows: cash $22,000,accounts receivable $16,000,office equipment $50,000,and accounts payable $17,000.What is the amount of owner's equity?

Accepted Answer

A) $17,000. 
B) $29,000. 
C) $71,000. 
D) $88,000. 
E) $105,000. 
A) $17,000. 
B) $29,000. 
C) $71,000. 
D) $88,000. 
E) $105,000.

Question 10

Rushing 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 11

A company's balance sheet shows: cash $24,000,accounts receivable $30,000,equipment $50,000,and equity $72,000.What is the amount of liabilities?

Accepted Answer

A) $104,000. 
B) $76,000. 
C) $32,000. 
D) $68,000. 
E) $176,000. 
A) $104,000. 
B) $76,000. 
C) $32,000. 
D) $68,000. 
E) $176,000.

Question 12

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit.How does this transaction affect the accounting equation for Atkins?

Accepted Answer

A) Assets would decrease $1,750 and liabilities would decrease $1,750. 
B) One asset would increase $1,750 and a different asset would decrease $1,750,causing no effect. 
C) Assets would increase $1,750 and equity would increase $1,750. 
D) Assets would increase $1,750 and liabilities would increase $1,750. 
E) Liabilities would decrease $1,750 and equity would increase $1,750. 
A) Assets would decrease $1,750 and liabilities would decrease $1,750. 
B) One asset would increase $1,750 and a different asset would decrease $1,750,causing no effect. 
C) Assets would increase $1,750 and equity would increase $1,750. 
D) Assets would increase $1,750 and liabilities would increase $1,750. 
E) Liabilities would decrease $1,750 and equity would increase $1,750.

Question 13

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Accepted Answer

A) Increased $22,000. 
B) Decreased $22,000. 
C) Increased $89,000. 
D) Decreased $156,000. 
E) Increased $156,000. 
A) Increased $22,000. 
B) Decreased $22,000. 
C) Increased $89,000. 
D) Decreased $156,000. 
E) Increased $156,000.

Question 14

Increases in equity from a company's sales of products or services are:

Accepted Answer

A) Assets. 
B) Revenues. 
C) Liabilities. 
D) Owner's Equity. 
E) Expenses. 
A) Assets. 
B) Revenues. 
C) Liabilities. 
D) Owner's Equity. 
E) Expenses.

Question 15

An example of a financing activity is:

Accepted Answer

A) Buying office supplies. 
B) Obtaining a long-term loan. 
C) Buying office equipment. 
D) Selling inventory. 
E) Buying land. 
A) Buying office supplies. 
B) Obtaining a long-term loan. 
C) Buying office equipment. 
D) Selling inventory. 
E) Buying land.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Accepted Answer

A) True 
 B)False

Question 18

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 19

External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 20

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

Savvy Sightseeing 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.

Return on assets is often stated in ratio form as the amount of average total assets divided by income.

The basic financial statements include all of the following except:

A net loss occurs when revenues exceed expenses.

If assets are $300,000 and liabilities are $192,000,then equity equals:

In accounting,the rule that requires that assets,services,and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ______________________________.

The records of Roadmaster Auto Rentals show the following information as of December 31.The owner,Rob Fletcher withdrew $52,000 during the year for personal expenses.Prepare a December income statement,a December statement of owner's equity,and a December 30 balance sheet.

If assets are $99,000 and liabilities are $32,000,then equity equals:

A company's balance sheet shows: cash $22,000,accounts receivable $16,000,office equipment $50,000,and accounts payable $17,000.What is the amount of owner's equity?

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

A company's balance sheet shows: cash $24,000,accounts receivable $30,000,equipment $50,000,and equity $72,000.What is the amount of liabilities?

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit.How does this transaction affect the accounting equation for Atkins?

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Increases in equity from a company's sales of products or services are:

An example of a financing activity is:

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

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

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

External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

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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