Question 1

Determine the net income of a company for which the following information is available for the month of September.

Accepted Answer

A) $263,800. 
B) $432,200. 
C) $171,000. 
D) $167,800. 
E) $252,000. 
A) $263,800. 
B) $432,200. 
C) $171,000. 
D) $167,800. 
E) $252,000.

Question 2

Assets created by selling goods and services on credit are:

Accepted Answer

A) Accounts payable. 
B) Accounts receivable. 
C) Liabilities. 
D) Expenses. 
E) Equity. 
A) Accounts payable. 
B) Accounts receivable. 
C) Liabilities. 
D) Expenses. 
E) Equity.

Question 3

Net income occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 4

Cragmont has beginning equity of $277,000,net income of $63,000,withdrawals of $25,000 and no additional investments by owners during the period.Its ending equity is:

Accepted Answer

A) $365,000. 
B) $239,000. 
C) $189,000. 
D) $315,000. 
E) $277,000. 
A) $365,000. 
B) $239,000. 
C) $189,000. 
D) $315,000. 
E) $277,000.

Question 5

A partnership:

Accepted Answer

A) Is also called a sole proprietorship. 
B) Has unlimited liability for its partners. 
C) Has to have a written agreement in order to be legal. 
D) Is a legal organization separate from its owners. 
E) Has owners called shareholders. 
A) Is also called a sole proprietorship. 
B) Has unlimited liability for its partners. 
C) Has to have a written agreement in order to be legal. 
D) Is a legal organization separate from its owners. 
E) Has owners called shareholders.

Question 6

Operating activities:

Accepted Answer

A) Are the means organizations use to pay for resources like land,buildings and equipment. 
B) Involve using resources to research,develop,purchase,produce,distribute and market products and services. 
C) Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services. 
D) Are also called asset management. 
E) Are also called strategic management. 
A) Are the means organizations use to pay for resources like land,buildings and equipment. 
B) Involve using resources to research,develop,purchase,produce,distribute and market products and services. 
C) Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services. 
D) Are also called asset management. 
E) Are also called strategic management.

Question 7

Owners of a corporation are called shareholders or stockholders.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Owner's investments are increases in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 10

An income statement reports on investing and financing activities.

Accepted Answer

A) True 
 B)False

Question 11

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Accepted Answer

A) True 
 B)False

Question 12

The monetary unit assumption means that all companies doing business in the United States must express transactions and events in U.S.dollars.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Marsha Bogswell is the owner of Bogswell Legal Services.Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

Accepted Answer

A) Monetary unit assumption. 
B) Going-concern assumption. 
C) Cost principle. 
D) Business entity assumption. 
E) Matching principle. 
A) Monetary unit assumption. 
B) Going-concern assumption. 
C) Cost principle. 
D) Business entity assumption. 
E) Matching principle.

Question 15

U.S.government bonds are:

Accepted Answer

A) High-risk and high-return investments. 
B) Low-risk and low-return investments. 
C) High-risk and low-return investments. 
D) Low-risk and high-return investments. 
E) High risk and no-return investments. 
A) High-risk and high-return investments. 
B) Low-risk and low-return investments. 
C) High-risk and low-return investments. 
D) Low-risk and high-return investments. 
E) High risk and no-return investments.

Question 16

Resources such as cash removed from the business by the business owner for personal use are called ____________.

Accepted Answer

The answer of Resources such as cash removed from the...

Question 17

All of the following are classified as assets except:

Accepted Answer

A) Accounts Receivable. 
B) Supplies. 
C) Equipment. 
D) Accounts Payable. 
E) Land. 
A) Accounts Receivable. 
B) Supplies. 
C) Equipment. 
D) Accounts Payable. 
E) Land.

Question 18

An owner's investment in a business normally creates an asset (cash),a liability (note payable),and owner's equity (investment. )

Accepted Answer

A) True 
 B)False

Question 19

Risk is the uncertainty about the return we will earn.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following purposes would financial statements serve for external users?

Accepted Answer

A) To find information about projected costs and revenues of proposed products. 
B) To assess employee performance and compensation. 
C) To assist in monitoring consumer needs and price concerns. 
D) To fulfill regulatory requirements for companies whose stock is sold to the public. 
E) To determine purchasing needs. 
A) To find information about projected costs and revenues of proposed products. 
B) To assess employee performance and compensation. 
C) To assist in monitoring consumer needs and price concerns. 
D) To fulfill regulatory requirements for companies whose stock is sold to the public. 
E) To determine purchasing needs.

Exam 1: Accounting in Business

Determine the net income of a company for which the following information is available for the month of September.

Assets created by selling goods and services on credit are:

Net income occurs when revenues exceed expenses.

Cragmont has beginning equity of $277,000,net income of $63,000,withdrawals of $25,000 and no additional investments by owners during the period.Its ending equity is:

A partnership:

Operating activities:

Owners of a corporation are called shareholders or stockholders.

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

Owner's investments are increases in equity from a company's earnings activities.

An income statement reports on investing and financing activities.

Return on assets reflects a company's ability to generate profit through productive use of its assets.

The monetary unit assumption means that all companies doing business in the United States must express transactions and events in U.S.dollars.

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

Marsha Bogswell is the owner of Bogswell Legal Services.Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

U.S.government bonds are:

Resources such as cash removed from the business by the business owner for personal use are called ____________.

All of the following are classified as assets except:

An owner's investment in a business normally creates an asset (cash),a liability (note payable),and owner's equity (investment. )

Risk is the uncertainty about the return we will earn.

Which of the following purposes would financial statements serve for external users?

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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