Question 1

Unlimited liability is an advantage for both a proprietorship and a partnership.

Accepted Answer

A) True 
 B)False

Question 2

The assets of a business total $20,000; the liabilities, $8,000. The claims of the owners are

Accepted Answer

A)  $0 
B)  $8,000 
C)  $12,000 
D)  $20,000 
E)  $28,000 
A)  $0 
B)  $8,000 
C)  $12,000 
D)  $20,000 
E)  $28,000

Question 3

The financial statement that shows the beginning balance of equity, the changes in equity that resulted from new investments by the owner, Profit (or net loss), withdrawals, and the ending balance of equity 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 equity 
A)  statement of financial position 
B)  statement of cash flows 
C)  balance sheet 
D)  income statement 
E)  statement of changes in equity

Question 4

Under which one of the following situations can a company recognize revenue under Generally Accepted Accounting Principles?

Accepted Answer

A)  A customer signs a contract to purchase goods to be delivered in two weeks. 
B)  A company completes production of a customer order to be delivered in two weeks. 
C)  A company ships the goods for which it received a deposit two weeks ago. 
D)  A company receives a cash deposit from a customer to deliver goods in two weeks. 
E)  A company purchased raw materials to complete production of a customer order. 
A)  A customer signs a contract to purchase goods to be delivered in two weeks. 
B)  A company completes production of a customer order to be delivered in two weeks. 
C)  A company ships the goods for which it received a deposit two weeks ago. 
D)  A company receives a cash deposit from a customer to deliver goods in two weeks. 
E)  A company purchased raw materials to complete production of a customer order.

Question 5

Ethics and laws often differ.

Accepted Answer

A) True 
 B)False

Question 6

On November 1, 2020, Jill Luckovich began Jill Luckovich Interior Design Co. with an initial investment of $6,725, and on November 30 her records showed the following (alphabetically arranged) account balances:
  
-From the information given in reference, prepare a November 30 balance sheet.

Accepted Answer

The answer of On November 1, 2020, Jill Luckovich began...

Question 7

External users of accounting information include

Accepted Answer

A)  shareholders 
B)  customers 
C)  creditors 
D)  the press 
E)  All of these 
A)  shareholders 
B)  customers 
C)  creditors 
D)  the press 
E)  All of these

Question 8

A partnership requires no special legal requirements to start, other than to register the business name and obtain a business licence.

Accepted Answer

A) True 
 B)False

Question 9

On November 1, 2020, Jill Luckovich began Jill Luckovich Interior Design Co. with an initial investment of $6,725, and on November 30 her records showed the following (alphabetically arranged) account balances:
  
-From the information given in reference, prepare a statement of changes in equity for November.

Accepted Answer

The answer of On November 1, 2020, Jill Luckovich began...

Question 10

If equity is $30,000 and liabilities are $73,000, then assets equal

Accepted Answer

A)  $30,000 
B)  $40,000 
C)  $60,000 
D)  $73,000 
E)  $103,000 
A)  $30,000 
B)  $40,000 
C)  $60,000 
D)  $73,000 
E)  $103,000

Question 11

You are the accountant for Klemmer Corporation. At the company's year end, December 31, 2020, you discover there is an amount of $30,000 that has been earned by Klemmer but not yet billed to its customers by the year end. Laura Klemmer, the owner, tells you not to bill the customers as it is company policy not to bill customers until February 2020, well after the Christmas holidays. Klemmer has sales staff that are paid a bonus at year end on sales revenue billed.
-Describe the relationship between sales (or revenues), expenses, and profit.

Accepted Answer

Sales, or revenues, are the am

Question 12

List the three main differences between the sole proprietorship and the corporate form of business.

Accepted Answer

The answer of List the three main differences between the...

Question 13

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 revenue as the amount of 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 principle 
B)  historical cost principle 
C)  revenue recognition principle 
D)  currency principle 
E)  business entity principle 
A)  going concern principle 
B)  historical cost principle 
C)  revenue recognition principle 
D)  currency principle 
E)  business entity principle

Question 14

Why should assets be recorded at historical cost?

Accepted Answer

Historical cost is the most commonly ado

Question 15

The accounting equation can be restated as assets - equity = liabilities.

Accepted Answer

A) True 
 B)False

Question 16

The conceptual framework summarizes the qualitative characteristics and supportive building blocks that are required to prepare financial information.

Accepted Answer

A) True 
 B)False

Question 17

A statement of profit and loss is another name for

Accepted Answer

A)  the income statement 
B)  the balance sheet 
C)  the statement of cash flows 
D)  the statement of changes in equity 
E)  the accounting equation 
A)  the income statement 
B)  the balance sheet 
C)  the statement of cash flows 
D)  the statement of changes in equity 
E)  the accounting equation

Question 18

Equity is increased by owner investments, profit and withdrawals.

Accepted Answer

A) True 
 B)False

Question 19

Describe three measurement methods based on current values.

Accepted Answer

Current cost. Current cost indicates the

Question 20

If the liabilities of a business increased $8,000 during a period of time and equity in the business decreased $4,000 during the same period, the assets of the business must have

Accepted Answer

A)  Decreased $12,000 
B)  Decreased $4,000 
C)  Increased $12,000 
D)  Increased $4,000 
E)  Increased $6,000 
A)  Decreased $12,000 
B)  Decreased $4,000 
C)  Increased $12,000 
D)  Increased $4,000 
E)  Increased $6,000

Unlimited liability is an advantage for both a proprietorship and a partnership.

The assets of a business total $20,000; the liabilities, $8,000. The claims of the owners are

The financial statement that shows the beginning balance of equity, the changes in equity that resulted from new investments by the owner, Profit (or net loss), withdrawals, and the ending balance of equity is the

Under which one of the following situations can a company recognize revenue under Generally Accepted Accounting Principles?

Ethics and laws often differ.

On November 1, 2020, Jill Luckovich began Jill Luckovich Interior Design Co. with an initial investment of $6,725, and on November 30 her records showed the following (alphabetically arranged) account balances: -From the information given in reference, prepare a November 30 balance sheet.

External users of accounting information include

A partnership requires no special legal requirements to start, other than to register the business name and obtain a business licence.

If equity is $30,000 and liabilities are $73,000, then assets equal

List the three main differences between the sole proprietorship and the corporate form of business.

Why should assets be recorded at historical cost?

The accounting equation can be restated as assets - equity = liabilities.

The conceptual framework summarizes the qualitative characteristics and supportive building blocks that are required to prepare financial information.

A statement of profit and loss is another name for

Equity is increased by owner investments, profit and withdrawals.

Describe three measurement methods based on current values.

If the liabilities of a business increased $8,000 during a period of time and equity in the business decreased $4,000 during the same period, the assets of the business must have

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters

Exam 1: Accounting in Business

Unlimited liability is an advantage for both a proprietorship and a partnership.

The assets of a business total $20,000; the liabilities, $8,000. The claims of the owners are

The financial statement that shows the beginning balance of equity, the changes in equity that resulted from new investments by the owner, Profit (or net loss), withdrawals, and the ending balance of equity is the

Under which one of the following situations can a company recognize revenue under Generally Accepted Accounting Principles?

Ethics and laws often differ.

On November 1, 2020, Jill Luckovich began Jill Luckovich Interior Design Co. with an initial investment of $6,725, and on November 30 her records showed the following (alphabetically arranged) account balances: -From the information given in reference, prepare a November 30 balance sheet.

External users of accounting information include

A partnership requires no special legal requirements to start, other than to register the business name and obtain a business licence.

If equity is $30,000 and liabilities are $73,000, then assets equal

List the three main differences between the sole proprietorship and the corporate form of business.

Why should assets be recorded at historical cost?

The accounting equation can be restated as assets - equity = liabilities.

The conceptual framework summarizes the qualitative characteristics and supportive building blocks that are required to prepare financial information.

A statement of profit and loss is another name for

Equity is increased by owner investments, profit and withdrawals.

Describe three measurement methods based on current values.

If the liabilities of a business increased $8,000 during a period of time and equity in the business decreased $4,000 during the same period, the assets of the business must have

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters