Question 1

The following are examples of external users of accounting information except

Accepted Answer

A)  government entities 
B)  customers 
C)  creditors 
D)  managers 
A)  government entities 
B)  customers 
C)  creditors 
D)  managers

Question 2

A retained earnings statement reports the changes in the retained earnings for a period of time.

Accepted Answer

A) True 
 B)False

Question 3

Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting principles?

Accepted Answer

A)  FASB 
B)  IRS 
C)  SEC 
D)  AICPA 
A)  FASB 
B)  IRS 
C)  SEC 
D)  AICPA

Question 4

Which type of accountant typically practices as an individual or as a member of a public accounting firm?

Accepted Answer

A)  Certified Public Accountant 
B)  Certified Payroll Professional 
C)  Certified Internal Auditor 
D)  Certified Management Accountant 
A)  Certified Public Accountant 
B)  Certified Payroll Professional 
C)  Certified Internal Auditor 
D)  Certified Management Accountant

Question 5

The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of stockholders.

Accepted Answer

A) True 
 B)False

Question 6

Accounting information users need reports about the economic activities and condition of businesses.

Accepted Answer

A) True 
 B)False

Question 7

Bob Johnson is the sole owner of Johnson's Carpet Cleaning Service. Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity concept.

Accepted Answer

Under the business entity concept, econo

Question 8

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

Accepted Answer

A)  increase an asset, decrease another asset 
B)  decrease an asset, decrease a liability 
C)  increase an asset, increase a liability 
D)  increase an asset, increase stockholders' equity 
A)  increase an asset, decrease another asset 
B)  decrease an asset, decrease a liability 
C)  increase an asset, increase a liability 
D)  increase an asset, increase stockholders' equity

Question 9

Which of the following groups are considered to be internal users of accounting information?

Accepted Answer

A)  employees and customers 
B)  customers and vendors 
C)  employees and managers 
D)  government entities and banks 
A)  employees and customers 
B)  customers and vendors 
C)  employees and managers 
D)  government entities and banks

Question 10

Match each of the following characteristics with the financial statement it describes. Each financial statement may be used more than once.
-Reports as of a specific date

Accepted Answer

A) Income statement 
B) Balance sheet 
C) Statement of retained earnings 
D) Statement of cash flows 
A) Income statement 
B) Balance sheet 
C) Statement of retained earnings 
D) Statement of cash flows

Question 11

Determine the missing amount "X" for each of the following: $\begin{array}{|lc|l|l|}
\hline & \text { Assets } & \text { Liabilities } &{\text { Stockholders' Equity }} \
\hline \text { a) } & \$ 78,500 & \$ 37,600 & X \
\hline \text { b) } & \mathrm{X} & \$ 53,280 & \$ 145,000 \
\hline \text { c) } & \$ 49,500 & \mathrm{X} & \$ 34,000\\hline
\end{array}$

Accepted Answer

a) $40,900 $78,500 −

Question 12

Explain the meaning of:
a) the objectivity concept
b) the unit of measure concept

Accepted Answer

a) The objectivity concept requires that

Question 13

At December 31 of the current year, Martin Consultants has assets of $430,000 and liabilities of $205,000. Using the accounting equation and considering each case independently, determine the following:
a) Stockholders' equity, as of December 31.
b) Stockholders' equity, as of December 31 of the next year, assuming that assets increased by $12,000 and liabilities increased by $15,000.
c) Stockholders' equity, as of December 31 of the next year, assuming that assets decreased by $8,000 and liabilities increased by $14,000.

Accepted Answer

a) $430,000 − $205,000 = $225,

Question 14

Many countries outside the United States use financial accounting standards issued by the

Accepted Answer

A)  AICPA 
B)  SEC 
C)  IASB 
D)  FASB 
A)  AICPA 
B)  SEC 
C)  IASB 
D)  FASB

Question 15

Match the following business types with each business listed below. Each may be used more than once.
-A hospital

Accepted Answer

A) Service firm 
B) Manufacturing firm 
C) Merchandising firm 
A) Service firm 
B) Manufacturing firm 
C) Merchandising firm

Question 16

Which of the following is not a business transaction?

Accepted Answer

A)  Erin, the CEO, buys $15,000 in stock in a bank account in the name of Bob's Lawn Service. 
B)  Erin provided services to customers earning fees of $600. 
C)  Erin purchased hedge trimmers for Bob's Lawn service agreeing to pay the supplier next month. 
D)  Erin pays her monthly personal credit card bill. 
A)  Erin, the CEO, buys $15,000 in stock in a bank account in the name of Bob's Lawn Service. 
B)  Erin provided services to customers earning fees of $600. 
C)  Erin purchased hedge trimmers for Bob's Lawn service agreeing to pay the supplier next month. 
D)  Erin pays her monthly personal credit card bill.

Question 17

The initials GAAP stand for

Accepted Answer

A)  General Accounting Procedures 
B)  Generally Accepted Plans 
C)  Generally Accepted Accounting Principles 
D)  Generally Accepted Accounting Practices 
A)  General Accounting Procedures 
B)  Generally Accepted Plans 
C)  Generally Accepted Accounting Principles 
D)  Generally Accepted Accounting Practices

Question 18

Identify which of the following accounts would appear on a balance sheet.
a) Cash
b) Fees earned
c) Common stock
d) Wages payable
e) Rent expense
f) Prepaid advertising
g) Land

Accepted Answer

The answer of Identify which of the following accounts would...

Question 19

Ramos Repair Company is paying a cash dividend. How does this transaction affect Ramos Repair Company's accounting equation?

Accepted Answer

A)  increase assets Accounts Receivable) and decrease assets Cash) 
B)  decrease assets Cash) and decrease stockholders' equity Dividends) 
C)  decrease assets Cash) and decrease liabilities Accounts Payable) 
D)  increase assets Cash) and decrease stockholders' equity Dividends) 
A)  increase assets Accounts Receivable) and decrease assets Cash) 
B)  decrease assets Cash) and decrease stockholders' equity Dividends) 
C)  decrease assets Cash) and decrease liabilities Accounts Payable) 
D)  increase assets Cash) and decrease stockholders' equity Dividends)

Question 20

The primary financial statements of a corporation are the income statement, retained earnings statement, and the balance sheet.

Accepted Answer

A) True 
 B)False

Exam 1: Introduction to Accounting and Business

The following are examples of external users of accounting information except

A retained earnings statement reports the changes in the retained earnings for a period of time.

Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting principles?

Which type of accountant typically practices as an individual or as a member of a public accounting firm?

The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of stockholders.

Accounting information users need reports about the economic activities and condition of businesses.

Bob Johnson is the sole owner of Johnson's Carpet Cleaning Service. Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity concept.

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

Which of the following groups are considered to be internal users of accounting information?

Match each of the following characteristics with the financial statement it describes. Each financial statement may be used more than once. -Reports as of a specific date

Determine the missing amount "X" for each of the following: Assets Liabilities Stockholders' Equity a) \ 78,500 \ 37,600 X b) \ 53,280 \ 145,000 c) \ 49,500 \ 34,000

Explain the meaning of: a) the objectivity concept b) the unit of measure concept

Many countries outside the United States use financial accounting standards issued by the

Match the following business types with each business listed below. Each may be used more than once. -A hospital

Which of the following is not a business transaction?

The initials GAAP stand for

Identify which of the following accounts would appear on a balance sheet. a) Cash b) Fees earned c) Common stock d) Wages payable e) Rent expense f) Prepaid advertising g) Land

Ramos Repair Company is paying a cash dividend. How does this transaction affect Ramos Repair Company's accounting equation?

The primary financial statements of a corporation are the income statement, retained earnings statement, and the balance sheet.

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Filters