Question 1

Rent expense appears on which of the following statements?

Accepted Answer

A) Balance sheet. 
B) Income statement. 
C) Statement of owner's equity. 
D) Statement of periodic expenses. 
E) Statement of cash flows only. 
A) Balance sheet. 
B) Income statement. 
C) Statement of owner's equity. 
D) Statement of periodic expenses. 
E) Statement of cash flows only.

Question 2

Understanding generally accepted accounting principles is not necessary to effectively use and interpret financial statements.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Every business transaction leaves the accounting equation in balance.

Accepted Answer

A) True 
 B)False

Question 5

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Accepted Answer

A) True 
 B)False

Question 6

The financial statement that identifies a company's cash receipts and cash payments over a period of time is the:

Accepted Answer

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

Question 7

A sole proprietorship is a business owned by one or more persons.

Accepted Answer

A) True 
 B)False

Question 8

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Accepted Answer

A) True 
 B)False

Question 9

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Accepted Answer

A) True 
 B)False

Question 10

Flitter reported net income of $17,500 for the past year.At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities.By the end of the year,assets had increased to $300,000 and liabilities were $75,000.Calculate its return on assets:

Accepted Answer

A) 8.8% 
B) 7.0% 
C) 5.8% 
D) 35.0% 
E) 23.3% 
A) 8.8% 
B) 7.0% 
C) 5.8% 
D) 35.0% 
E) 23.3%

Question 11

There are three major types of business activities.________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

Accepted Answer

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

Question 12

If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period,what was the effect on the assets?

Accepted Answer

A) Assets would have increased $55,000. 
B) Assets would have decreased $55,000. 
C) Assets would have increased $19,000. 
D) Assets would have decreased $19,000. 
E) None of thesE.Assets = Liabilities + Owner's Equity 
A) Assets would have increased $55,000. 
B) Assets would have decreased $55,000. 
C) Assets would have increased $19,000. 
D) Assets would have decreased $19,000. 
E) None of thesE.Assets = Liabilities + Owner's Equity

Question 13

Soo Lin began an Internet Consulting practice and completed these transactions during April of the current year:   Show the effects of the above transactions on the accounting equation of Soo Lin,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 Soo Lin began an Internet Consulting practice...

Question 14

Prepare a December 31 balance sheet in proper form for Smokey River Supplies from the following list of the accounts:

Accepted Answer

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

Question 15

_________________ is net income divided by average total assets.

Accepted Answer

The answer of _________________ is net income divided by average...

Question 16

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 17

________________________________ explains changes in the owner's claim on the business's assets from net income or loss,owner investments,and owner withdrawals over a period of time.

Accepted Answer

The statem

Question 18

U.S.Government Treasury bonds provide low return and low risk to investors.

Accepted Answer

A) True 
 B)False

Question 19

An accounting information system communicates data to help users make better decisions.

Accepted Answer

A) True 
 B)False

Question 20

The statement of owner's equity:

Accepted Answer

A) Reports how equity changes at a point in time. 
B) Reports how equity changes over a period of time. 
C) Reports on cash flows for operating,financing,and investing activities over a period of time. 
D) Reports on cash flows for operating,financing,and investing activities at a point in time. 
E) Reports on amounts for assets,liabilities,and equity at a point in time. 
A) Reports how equity changes at a point in time. 
B) Reports how equity changes over a period of time. 
C) Reports on cash flows for operating,financing,and investing activities over a period of time. 
D) Reports on cash flows for operating,financing,and investing activities at a point in time. 
E) Reports on amounts for assets,liabilities,and equity at a point in time.

Exam 1: Accounting in Business

Rent expense appears on which of the following statements?

Understanding generally accepted accounting principles is not necessary to effectively use and interpret financial statements.

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

Every business transaction leaves the accounting equation in balance.

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

The financial statement that identifies a company's cash receipts and cash payments over a period of time is the:

A sole proprietorship is a business owned by one or more persons.

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Flitter reported net income of $17,500 for the past year.At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities.By the end of the year,assets had increased to $300,000 and liabilities were $75,000.Calculate its return on assets:

There are three major types of business activities.________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period,what was the effect on the assets?

Prepare a December 31 balance sheet in proper form for Smokey River Supplies from the following list of the accounts:

_________________ is net income divided by average total assets.

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

________________________________ explains changes in the owner's claim on the business's assets from net income or loss,owner investments,and owner withdrawals over a period of time.

U.S.Government Treasury bonds provide low return and low risk to investors.

An accounting information system communicates data to help users make better decisions.

The statement of owner's equity:

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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