Exam 1: Introduction to Accounting and Business

A merchandising business buys products from other businesses to sell to customers.

The Sarbanes-Oxley Act established standards for corporate responsibility and disclosure.

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

Goods purchased on account for future use in the business, such as supplies, are called

Ramon Ramos has withdrawn $750 from Ramos Repair Company's cash account to deposit in his personal account. How does this transaction affect Ramos Repair Company's accounting equation?

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Often used as an alternative to a partnership

Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once. -A formal presentation of the accounting equation

Managerial accounting information is used by external and internal users equally.

Most businesses in the United States are

A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the

Companies like Enron, WorldCom, and Tyco International, Ltd. have been caught in the midst of ethical lapses that led to fines, firings, and criminal and/or civil prosecution. List and briefly describe three factors that are responsible for what went wrong in these companies.

Some of the major fraudulent acts committed by senior executives started as what they considered to be small ethical lapses that grew out of control.

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

On March 1, the amount of Richard Cook's capital in Richard's Catering Company was $150,000. During March, he withdrew $31,000 from the business. The amounts of the various assets, liabilities, revenues, and expenses are as follows:​ Accounts payable \ 10,250 Accounts receivable 45,950 Cash 23,840 Fees earned 64,950 Insurance expense 1,275 Land 85,400 Miscellaneous expense 1,210 Prepaid insurance 3,000 Rent expense 9,000 Salary expense 20,300 Supplies 900 Supplies expense 525 Utilities expense 2,800 Present, in good form, (a) an income statement for March, (b) a statement of owner's equity for March, and (c) a balance sheet as of March 31.

Which of the following groups of companies includes examples of merchandising businesses?