Question 1

Which of the following is incurred by a business when it borrows money?

Accepted Answer

A)  An accumulated depletion 
B)  A liability 
C)  A loss 
D)  An accrued expenditure 
A)  An accumulated depletion 
B)  A liability 
C)  A loss 
D)  An accrued expenditure B

Question 2

Costs incurred to earn revenue are referred to as _____.

Accepted Answer

A)  common stock 
B)  expenses 
C)  liabilities 
D)  retained earnings 
A)  common stock 
B)  expenses 
C)  liabilities 
D)  retained earnings B

Question 3

Pelican, Inc.had revenues of $395,000, expenses of $155,000, and dividends of $54,000 during the current year.​Based on the given information, which of the following statements is true?

Accepted Answer

A)  Net income for the current year totaled $240,000. 
B)  Net income for the current year totaled $186,000. 
C)  Total retained earnings increased by $240,000 during the current year. 
D)  Total retained earnings decreased by $186,000 during the current year. 
A)  Net income for the current year totaled $240,000. 
B)  Net income for the current year totaled $186,000. 
C)  Total retained earnings increased by $240,000 during the current year. 
D)  Total retained earnings decreased by $186,000 during the current year. A

Question 4

Which of the following is not a characteristic of a corporation?

Accepted Answer

A)  Corporations are organized as a separate legal taxable entity. 
B)  Ownership is divided into shares of stock. 
C)  Corporations experience an ease in obtaining large amounts of resources by issuing stock. 
D)  A corporation can elect to be taxed as a partnership. 
A)  Corporations are organized as a separate legal taxable entity. 
B)  Ownership is divided into shares of stock. 
C)  Corporations experience an ease in obtaining large amounts of resources by issuing stock. 
D)  A corporation can elect to be taxed as a partnership.

Question 5

Debts owed by a business are referred to as:

Accepted Answer

A)  accounts receivable. 
B)  equities. 
C)  stockholders' equity. 
D)  liabilities. 
A)  accounts receivable. 
B)  equities. 
C)  stockholders' equity. 
D)  liabilities.

Question 6

According to which of the following concepts should the expenses incurred when generating revenue be reported in the same period as the related revenue?

Accepted Answer

A)  The cost concept 
B)  The periodicity concept 
C)  The matching concept 
D)  The adequate disclosure concept 
A)  The cost concept 
B)  The periodicity concept 
C)  The matching concept 
D)  The adequate disclosure concept

Question 7

The purchase of factory equipment would be an example of which type of business activity?

Accepted Answer

A)  Financing 
B)  Investing 
C)  Operating 
D)  All of these 
A)  Financing 
B)  Investing 
C)  Operating 
D)  All of these

Question 8

Fill in the missing amounts of the following balance sheet: $\begin{array}{c}
\text { Prova Company }\
\text { Balance Sheet}\
\text {  December 31, 2016}\
\begin{array}{|l|r|r|}
\hline\text { Assets }\
\hline \text { Cash } & & \$ 3,300 \
\hline \text { Accounts Receivable } & & 2,400 \
\hline \text { Supplies } & & \mathbf{(a)} \
\hline \text { Inventory } & & 5,700 \
\hline \text { Equipment } & & 7,400 \
\hline \text { Land } & & 9,250 \
\hline \text { Total Assets } && \$ 32,550 \
\hline\text { Liabilities }\
\hline \text { Accounts Payable } & \$ 850 & \
\hline \text { Notes Payable } & \text { (b) } & \
\hline \text { Total Liabilities } & & \$ \quad \text { (c) } \
\hline \text { Stockholders' Equity }\
\hline \text { Common Stock } & \$ 18,500 & \
\hline \text { Retained Earnings } & 4,200 & \
\hline \text { Total Stockholders' Equity } & & 22,700 \
\hline \text { Total Liabilities and Stockholders' Equity } & & \underline{\underline{\$\quad (d)}} \
\hline
\end{array}\end{array}$

Accepted Answer

a) $4,500

Question 9

The debt created by a business when it borrows from a vendor or supplier is called a(n):

Accepted Answer

A)  account payable. 
B)  contingent liability. 
C)  intangible asset. 
D)  account receivable. 
A)  account payable. 
B)  contingent liability. 
C)  intangible asset. 
D)  account receivable.

Question 10

A summary of the cash receipts and cash payments for a specific period of time is a(n):

Accepted Answer

A)  income statement. 
B)  balance sheet. 
C)  statement of cash flows. 
D)  retained earnings statement. 
A)  income statement. 
B)  balance sheet. 
C)  statement of cash flows. 
D)  retained earnings statement.

Question 11

A limited liability company combines attributes of a partnership and a corporation.

Accepted Answer

A) True 
 B)False

Question 12

Use the following information to determine Total Stockholders' Equity: $$\begin{array} { l r } 
\text { Total Assets } & \$ 85,000 \
\text { Total Liabilities } & 21,000 \
\text { Total Stockholders' Equity } & x \
\text { Total Retained Earnings } & 9,000
\end{array}$$

Accepted Answer

A)  $58,000 
B)  $64,000 
C)  $55,000 
D)  $40,000 
A)  $58,000 
B)  $64,000 
C)  $55,000 
D)  $40,000

Question 13

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or an year, is called a(n):

Accepted Answer

A)  prior period statement. 
B)  statement of retained earnings. 
C)  income statement. 
D)  balance sheet. 
A)  prior period statement. 
B)  statement of retained earnings. 
C)  income statement. 
D)  balance sheet.

Question 14

What is the primary objective of most businesses?

Accepted Answer

A)  To maximize profits 
B)  To pay dividends to stockholders 
C)  To provide a benefit to society 
D)  To manufacture a quality product 
A)  To maximize profits 
B)  To pay dividends to stockholders 
C)  To provide a benefit to society 
D)  To manufacture a quality product

Question 15

Motel 6, a company that helps customers find budget motels across the nation, is an example of a business using which of the following?

Accepted Answer

A)  Low-cost emphasis 
B)  Outreach emphasis 
C)  Customer emphasis 
D)  Premium-price emphasis 
A)  Low-cost emphasis 
B)  Outreach emphasis 
C)  Customer emphasis 
D)  Premium-price emphasis

Question 16

The popularity of the sole proprietorship is due to the ease and low cost of organizing.

Accepted Answer

A) True 
 B)False

Question 17

-Review COCA-COLA'S financial statements and answer the following questions:
(1)How are Coke's numbers reported (in what denomination)?
(2)What is Coke's net operating revenue for 2008?
(3)What is Coke's cost of goods sold for 2008?
(4)What is Coke's net income 2008?
(5)What is Coke's percent of interest expense to net operating revenue on its 2008 income statement?
(6)What is Coke's percent of increase in net operating revenue from 2007 to 2008?

Accepted Answer

(1)In millions of dollars
(2)$

Question 18

-Review COCA-COLA'S financial statements and answer the following questions:
(1)What is Coke's percent of current assets to total assets on its December 31, 2008 balance sheet?
(2)What is Coke's percentage of current liabilities to total stockholders' equity on its December 31, 2008 balance sheet?
(3)What is the percentage increase in cash and cash equivalents from 2007 to 2008?
(4)What percentage did total assets decrease from 2007 to 2008?

Accepted Answer

(1)12,176/40,519 = 30.05%
(2)1

Question 19

Given the following list of accounts, calculate Total Assets: $$\begin{array} { l r } 
\text { Accounts Receivable } & \$ 10,000 \
\text { Capital Stock } & 20,000 \
\text { Cash } & 25,300 \
\text { Equipment } & 16,800 \
\text { Fees Earned } & 44,400 \
\text { Miscellaneous Expense } & 17,800 \
\text { Rent Expense } & 3,250 \
\text { Retained Earnings } & 7,850 \
\text { Salaries Expense } & 15,400 \
\text { Wages Expense } & 15,000
\end{array}$$

Accepted Answer

A)  $52,100 
B)  $55,300 
C)  $54,600 
D)  $40,050 
A)  $52,100 
B)  $55,300 
C)  $54,600 
D)  $40,050

Question 20

Accounting is thought to be the "language of business" because business information is communicated to stakeholders.

Accepted Answer

A) True 
 B)False

Which of the following is incurred by a business when it borrows money?

Costs incurred to earn revenue are referred to as _____.

Pelican, Inc.had revenues of $395,000, expenses of $155,000, and dividends of $54,000 during the current year.Based on the given information, which of the following statements is true?

Which of the following is not a characteristic of a corporation?

Debts owed by a business are referred to as:

According to which of the following concepts should the expenses incurred when generating revenue be reported in the same period as the related revenue?

The purchase of factory equipment would be an example of which type of business activity?

The debt created by a business when it borrows from a vendor or supplier is called a(n):

A summary of the cash receipts and cash payments for a specific period of time is a(n):

A limited liability company combines attributes of a partnership and a corporation.

Use the following information to determine Total Stockholders' Equity: Total Assets \ 85,000 Total Liabilities 21,000 Total Stockholders' Equity x Total Retained Earnings 9,000

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or an year, is called a(n):

What is the primary objective of most businesses?

Motel 6, a company that helps customers find budget motels across the nation, is an example of a business using which of the following?

The popularity of the sole proprietorship is due to the ease and low cost of organizing.

Given the following list of accounts, calculate Total Assets: Accounts Receivable \ 10,000 Capital Stock 20,000 Cash 25,300 Equipment 16,800 Fees Earned 44,400 Miscellaneous Expense 17,800 Rent Expense 3,250 Retained Earnings 7,850 Salaries Expense 15,400 Wages Expense 15,000

Accounting is thought to be the "language of business" because business information is communicated to stakeholders.

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 1: The Role of Accounting in Business

Which of the following is incurred by a business when it borrows money?

Costs incurred to earn revenue are referred to as _____.

Pelican, Inc.had revenues of $395,000, expenses of $155,000, and dividends of $54,000 during the current year.​Based on the given information, which of the following statements is true?

Which of the following is not a characteristic of a corporation?

Debts owed by a business are referred to as:

According to which of the following concepts should the expenses incurred when generating revenue be reported in the same period as the related revenue?

The purchase of factory equipment would be an example of which type of business activity?

The debt created by a business when it borrows from a vendor or supplier is called a(n):

A summary of the cash receipts and cash payments for a specific period of time is a(n):

A limited liability company combines attributes of a partnership and a corporation.

Use the following information to determine Total Stockholders' Equity: Total Assets \ 85,000 Total Liabilities 21,000 Total Stockholders' Equity x Total Retained Earnings 9,000

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or an year, is called a(n):

What is the primary objective of most businesses?

Motel 6, a company that helps customers find budget motels across the nation, is an example of a business using which of the following?

The popularity of the sole proprietorship is due to the ease and low cost of organizing.

Given the following list of accounts, calculate Total Assets: Accounts Receivable \ 10,000 Capital Stock 20,000 Cash 25,300 Equipment 16,800 Fees Earned 44,400 Miscellaneous Expense 17,800 Rent Expense 3,250 Retained Earnings 7,850 Salaries Expense 15,400 Wages Expense 15,000

Accounting is thought to be the "language of business" because business information is communicated to stakeholders.

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Costs

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Pelican, Inc.had revenues of $395,000, expenses of $155,000, and dividends of $54,000 during the current year.Based on the given information, which of the following statements is true?