Question 1

The assumption that requires that a business be accounted for separately from its owners is the ________ assumption.

Accepted Answer

The answer of The assumption that requires that a business...

Question 2

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of equity as of August 31 of the current year?

Accepted Answer

A) $49,100. 
B) $32,100. 
C) $12,100. 
D) $10,900. 
E) $30,900. 
A) $49,100. 
B) $32,100. 
C) $12,100. 
D) $10,900. 
E) $30,900.

Question 3

Saddleback Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Accepted Answer

A) Assets,$30,000 increase; equity,$30,000 increase. 
B) Assets,$30,000 decrease; liabilities,$30,000 decrease. 
C) Assets,$30,000 decrease; liabilities,$30,000 increase. 
D) Liabilities,$30,000 decrease; equity,$30,000 increase. 
E) Assets,$30,000 decrease; equity $30,000 decrease. 
A) Assets,$30,000 increase; equity,$30,000 increase. 
B) Assets,$30,000 decrease; liabilities,$30,000 decrease. 
C) Assets,$30,000 decrease; liabilities,$30,000 increase. 
D) Liabilities,$30,000 decrease; equity,$30,000 increase. 
E) Assets,$30,000 decrease; equity $30,000 decrease.

Question 4

Objectivity means that financial information is supported by independent,unbiased evidence; it demands more than a person's opinion.

Accepted Answer

A) True 
 B)False

Question 5

What distinguishes liabilities from equity?

Accepted Answer

Liabilities are creditors' claims on ass

Question 6

Ethical behavior requires that:

Accepted Answer

A) Auditors' pay not depend on the success of the client's business. 
B) Auditors invest in businesses they audit. 
C) Analysts report information favorable to their companies. 
D) Managers use accounting information to benefit themselves. 
E) Auditors' pay depends on the success of the client's business. 
A) Auditors' pay not depend on the success of the client's business. 
B) Auditors invest in businesses they audit. 
C) Analysts report information favorable to their companies. 
D) Managers use accounting information to benefit themselves. 
E) Auditors' pay depends on the success of the client's business.

Question 7

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.The client paid the entire $40,000 on the date the contract was signed.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) Measurement (Cost)principle. 
D) Business entity assumption. 
E) Revenue recognition principle. 
A) Monetary unit assumption. 
B) Going-concern assumption. 
C) Measurement (Cost)principle. 
D) Business entity assumption. 
E) Revenue recognition principle.

Question 8

The primary objective of financial accounting is to:

Accepted Answer

A) Serve the decision-making needs of internal users. 
B) Provide accounting information that serves external users. 
C) Monitor and control company activities. 
D) Provide information on both the costs and benefits of looking after products and services. 
E) Know what,when,and how much product to produce. 
A) Serve the decision-making needs of internal users. 
B) Provide accounting information that serves external users. 
C) Monitor and control company activities. 
D) Provide information on both the costs and benefits of looking after products and services. 
E) Know what,when,and how much product to produce.

Question 9

All of the following are true regarding ethics except:

Accepted Answer

A) Ethics are beliefs that distinguish right from wrong. 
B) Ethics rules are often set for CPAs. 
C) Ethics do not affect the operations or outcome of a company. 
D) Are critical in accounting. 
E) Ethics can be difficult to apply. 
A) Ethics are beliefs that distinguish right from wrong. 
B) Ethics rules are often set for CPAs. 
C) Ethics do not affect the operations or outcome of a company. 
D) Are critical in accounting. 
E) Ethics can be difficult to apply.

Question 10

How does the objectivity principle support ethical behavior?

Accepted Answer

The objectivity principle supports ethic

Question 11

Return on assets (ROA)is also known as return on investment (ROI).

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Explain the accounting equation and define its terms.

Accepted Answer

The accounting equation is stated as: As

Question 14

External users of accounting information do not directly run the organization and have limited access to its accounting information.

Accepted Answer

A) True 
 B)False

Question 15

The Sarbanes-Oxley Act (SOX)requires a business that sells stock to disclose a code of ethics for its executives.

Accepted Answer

A) True 
 B)False

Question 16

The income statement reports on operating activities at a point in time.

Accepted Answer

A) True 
 B)False

Question 17

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

Accepted Answer

A) True 
 B)False

Question 18

The business entity assumption:

Accepted Answer

A) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold. 
B) Means that we can express transactions and events in monetary,or money,units. 
C) Presumes that the life of a company can be divided into time periods,such as months and years,and that useful reports can be prepared for those periods. 
D) Means that a business is accounted for separately from other business entities,including its owners. 
E) Prescribes that a company record the expenses it incurred to generate the revenue reported. 
A) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold. 
B) Means that we can express transactions and events in monetary,or money,units. 
C) Presumes that the life of a company can be divided into time periods,such as months and years,and that useful reports can be prepared for those periods. 
D) Means that a business is accounted for separately from other business entities,including its owners. 
E) Prescribes that a company record the expenses it incurred to generate the revenue reported.

Question 19

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Accepted Answer

A) True 
 B)False

Question 20

The characteristics below apply to at least one of the forms of business organization.
a.Is a separate legal entity.
b.Is allowed to be owned by one person only.
c.Owner or owners are personally liable for debts of the business.
d.Is a separately taxable entity.
e.Is a business entity.
f.May have a contract specifying the division of profits among the owners.
g.Has an unlimited life
Use the following format to indicate (with a "yes" or "no")whether or not a characteristic applies to each type of business organization.

Accepted Answer

The answer of The characteristics below apply to at least...

The assumption that requires that a business be accounted for separately from its owners is the ________ assumption.

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of equity as of August 31 of the current year?

Saddleback Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Objectivity means that financial information is supported by independent,unbiased evidence; it demands more than a person's opinion.

What distinguishes liabilities from equity?

Ethical behavior requires that:

The primary objective of financial accounting is to:

All of the following are true regarding ethics except:

How does the objectivity principle support ethical behavior?

Return on assets (ROA)is also known as return on investment (ROI).

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

Explain the accounting equation and define its terms.

External users of accounting information do not directly run the organization and have limited access to its accounting information.

The Sarbanes-Oxley Act (SOX)requires a business that sells stock to disclose a code of ethics for its executives.

The income statement reports on operating activities at a point in time.

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

The business entity assumption:

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 1: Introducing Financial Statements

The assumption that requires that a business be accounted for separately from its owners is the ________ assumption.

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of equity as of August 31 of the current year?

Saddleback Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Objectivity means that financial information is supported by independent,unbiased evidence; it demands more than a person's opinion.

What distinguishes liabilities from equity?

Ethical behavior requires that:

The primary objective of financial accounting is to:

All of the following are true regarding ethics except:

How does the objectivity principle support ethical behavior?

Return on assets (ROA)is also known as return on investment (ROI).

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

Explain the accounting equation and define its terms.

External users of accounting information do not directly run the organization and have limited access to its accounting information.

The Sarbanes-Oxley Act (SOX)requires a business that sells stock to disclose a code of ethics for its executives.

The income statement reports on operating activities at a point in time.

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

The business entity assumption:

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters