Question 1

Ending capital reported on the statement of owner's equity is calculated by adding owner investments and net losses and subtracting net income and withdrawals.

Accepted Answer

A) True 
 B)False

Question 2

External users include lenders,shareholders,customers,and regulators.

Accepted Answer

A) True 
 B)False

Question 3

Technology:

Accepted Answer

A) Has replaced accounting. 
B) Has not improved the clerical accuracy of accounting. 
C) Reduces the time,effort and cost of recordkeeping. 
D) In accounting has replaced the need for decision makers. 
E) In accounting is only available to large corporations. 
A) Has replaced accounting. 
B) Has not improved the clerical accuracy of accounting. 
C) Reduces the time,effort and cost of recordkeeping. 
D) In accounting has replaced the need for decision makers. 
E) In accounting is only available to large corporations.

Question 4

The statement of cash flows reports all of the following except:

Accepted Answer

A) Cash flows from operating activities. 
B) Cash flows from investing activities. 
C) Cash flows from financing activities. 
D) The net increase or decrease in assets for the period reported. 
E) The net increase or decrease in cash for the period reported. 
A) Cash flows from operating activities. 
B) Cash flows from investing activities. 
C) Cash flows from financing activities. 
D) The net increase or decrease in assets for the period reported. 
E) The net increase or decrease in cash for the period reported.

Question 5

If a company receives $12,000 from the owner to establish a proprietorship,the effect on the accounting equation would be:

Accepted Answer

A) Assets decrease $12,000 and equity decreases $12,000. 
B) Assets increase $12,000 and liabilities decrease $12,000. 
C) Assets increase $12,000 and liabilities increase $12,000. 
D) Liabilities increase $12,000 and equity decreases $12,000. 
E) Assets increase $12,000 and equity increases $12,000. 
A) Assets decrease $12,000 and equity decreases $12,000. 
B) Assets increase $12,000 and liabilities decrease $12,000. 
C) Assets increase $12,000 and liabilities increase $12,000. 
D) Liabilities increase $12,000 and equity decreases $12,000. 
E) Assets increase $12,000 and equity increases $12,000.

Question 6

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

Accepted Answer

A) True 
 B)False

Question 7

Generally accepted accounting principles are the basic assumptions,concepts,and guidelines for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 8

The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity,pressure,and rationalization.

Accepted Answer

A) True 
 B)False

Question 9

Use the following information for Meeker Corp.to determine the amount of equity to report.

Accepted Answer

A) $390,000. 
B) $140,000. 
C) $20,000. 
D) $530,000. 
E) $270,000. 
A) $390,000. 
B) $140,000. 
C) $20,000. 
D) $530,000. 
E) $270,000.

Question 10

Decreases in equity that represent costs of providing products or services to customers,used to earn revenues are called:

Accepted Answer

A) Liabilities. 
B) Equity. 
C) Withdrawals. 
D) Expenses. 
E) Owner's Investment. 
A) Liabilities. 
B) Equity. 
C) Withdrawals. 
D) Expenses. 
E) Owner's Investment.

Question 11

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:

Accepted Answer

A) Accounting equation. 
B) Cost principle. 
C) Going-concern assumption. 
D) Realization principle. 
E) Business entity assumption. 
A) Accounting equation. 
B) Cost principle. 
C) Going-concern assumption. 
D) Realization principle. 
E) Business entity assumption.

Question 12

The rule that (1)requires revenue to be recognized at the time it is earned, (2)allows the inflow of assets associated with revenue to be in a form other than cash,and (3)measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services,is called the:

Accepted Answer

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

Question 13

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000.The company has revenues of $83,000 and expenses of $64,000.Calculate its net income.

Accepted Answer

A) $30,000. 
B) $83,000. 
C) $64,000. 
D) $19,000. 
E) $49,000. 
A) $30,000. 
B) $83,000. 
C) $64,000. 
D) $19,000. 
E) $49,000.

Question 14

On December 15 of the current year,Conrad Accounting Services signed a $40,000 contract with a client to provide bookkeeping services to the client in the following year.Which accounting principle would require Conrad Accounting Services to record the bookkeeping revenue in the following year and not the year the cash was received?

Accepted Answer

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

Question 15

All of the following regarding a Certified Public Accountant are true except:

Accepted Answer

A) Must meet education and experience requirements. 
B) Must pass an examination. 
C) Must exhibit ethical character. 
D) May also be a Certified Management Accountant. 
E) Cannot hold any certificate other than a CPA. 
A) Must meet education and experience requirements. 
B) Must pass an examination. 
C) Must exhibit ethical character. 
D) May also be a Certified Management Accountant. 
E) Cannot hold any certificate other than a CPA.

Question 16

Distributions of cash or other resources by a business to its owners are called:

Accepted Answer

A) Withdrawals. 
B) Expenses. 
C) Assets. 
D) Retained earnings. 
E) Net Income. 
A) Withdrawals. 
B) Expenses. 
C) Assets. 
D) Retained earnings. 
E) Net Income.

Question 17

All of the following are classified as liabilities except:

Accepted Answer

A) Accounts Receivable. 
B) Notes Payable. 
C) Wages Payable. 
D) Accounts Payable. 
E) Taxes Payable. 
A) Accounts Receivable. 
B) Notes Payable. 
C) Wages Payable. 
D) Accounts Payable. 
E) Taxes Payable.

Question 18

All of the following are classified as liabilities except:

Accepted Answer

A) Accounts Receivable. 
B) Notes Payable. 
C) Wages Payable. 
D) Accounts Payable. 
E) Taxes Payable. 
A) Accounts Receivable. 
B) Notes Payable. 
C) Wages Payable. 
D) Accounts Payable. 
E) Taxes Payable.

Question 19

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

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 20

The term ___________ refers to a liability that promises a future outflow of resources.

Accepted Answer

The answer of The term ___________ refers to a liability...

Exam 1: Accounting in Business

Ending capital reported on the statement of owner's equity is calculated by adding owner investments and net losses and subtracting net income and withdrawals.

External users include lenders,shareholders,customers,and regulators.

Technology:

The statement of cash flows reports all of the following except:

If a company receives $12,000 from the owner to establish a proprietorship,the effect on the accounting equation would be:

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

Generally accepted accounting principles are the basic assumptions,concepts,and guidelines for preparing financial statements.

The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity,pressure,and rationalization.

Use the following information for Meeker Corp.to determine the amount of equity to report.

Decreases in equity that represent costs of providing products or services to customers,used to earn revenues are called:

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000.The company has revenues of $83,000 and expenses of $64,000.Calculate its net income.

All of the following regarding a Certified Public Accountant are true except:

Distributions of cash or other resources by a business to its owners are called:

All of the following are classified as liabilities except:

All of the following are classified as liabilities except:

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

The term ___________ refers to a liability that promises a future outflow of resources.

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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