Question 1

Listed below in alphabetical order are the balance sheet items of Rowan Company at December 31, 2009. Prepare a balance sheet and include a complete heading.

Accepted Answer

The answer of Listed below in alphabetical order are the...

Question 2

Which of the following is not an advantage of the corporate form of business organization?

Accepted Answer

A)  Limited liability of stockholders 
B)  Transferability of ownership 
C)  Unlimited personal liability for stockholders 
D)  Unlimited life 
A)  Limited liability of stockholders 
B)  Transferability of ownership 
C)  Unlimited personal liability for stockholders 
D)  Unlimited life

Question 3

A net loss will result during a time period when

Accepted Answer

A)  liabilities exceed assets. 
B)  drawings exceed investments. 
C)  expenses exceed revenues. 
D)  revenues exceed expenses. 
A)  liabilities exceed assets. 
B)  drawings exceed investments. 
C)  expenses exceed revenues. 
D)  revenues exceed expenses.

Question 4

Accountants who are employees of business enterprises are referred to as ________________ accountants.

Accepted Answer

private (o

Question 5

The economic entity assumption requires that the activities

Accepted Answer

A)  of different entities can be combined if all the entities are corporations. 
B)  must be reported to the Securities and Exchange Commission. 
C)  of a sole proprietorship cannot be distinguished from the personal economic events of its owners. 
D)  of an entity be kept separate from the activities of its owner. 
A)  of different entities can be combined if all the entities are corporations. 
B)  must be reported to the Securities and Exchange Commission. 
C)  of a sole proprietorship cannot be distinguished from the personal economic events of its owners. 
D)  of an entity be kept separate from the activities of its owner.

Question 6

Match the following terms and definitions.
a. Accounts receivable c. Accounts payable
b. Creditor d. Note payable
_______ (1) Amounts due from customers
_______ (2) Amounts owed to suppliers for goods and services purchased
_______ (3) Amounts owed to bank
_______ (4) Party to whom money is owed
Solution 165

Accepted Answer

The answer of Match the following terms and definitions.
a. Accounts...

Question 7

Revenues would not result from

Accepted Answer

A)  sale of merchandise. 
B)  initial investment of cash by owner. 
C)  performance of services. 
D)  rental of property. 
A)  sale of merchandise. 
B)  initial investment of cash by owner. 
C)  performance of services. 
D)  rental of property.

Question 8

A balance sheet shows

Accepted Answer

A)  revenues, liabilities, and owner's equity. 
B)  expenses, drawings, and owner's equity. 
C)  revenues, expenses, and drawings. 
D)  assets, liabilities, and owner's equity. 
A)  revenues, liabilities, and owner's equity. 
B)  expenses, drawings, and owner's equity. 
C)  revenues, expenses, and drawings. 
D)  assets, liabilities, and owner's equity.

Question 9

If an owner makes a withdrawal of cash from a proprietorship, then

Accepted Answer

A)  there has been a violation of accounting principles. 
B)  owner's equity will increase. 
C)  owner's equity will decrease. 
D)  there will be a new liability showing the owner owes money to the business. 
A)  there has been a violation of accounting principles. 
B)  owner's equity will increase. 
C)  owner's equity will decrease. 
D)  there will be a new liability showing the owner owes money to the business.

Question 10

An income statement

Accepted Answer

A)  summarizes the changes in owner's equity for a specific period of time. 
B)  reports the changes in assets, liabilities, and owner's equity over a period of time. 
C)  reports the assets, liabilities, and owner's equity at a specific date. 
D)  presents the revenues and expenses for a specific period of time. 
A)  summarizes the changes in owner's equity for a specific period of time. 
B)  reports the changes in assets, liabilities, and owner's equity over a period of time. 
C)  reports the assets, liabilities, and owner's equity at a specific date. 
D)  presents the revenues and expenses for a specific period of time.

Question 11

If total liabilities decreased by $15,000 and owner's equity decreased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

Accepted Answer

A)  $20,000 increase 
B)  $10,000 increase 
C)  $20,000 decrease 
D)  $10,000 decrease 
A)  $20,000 increase 
B)  $10,000 increase 
C)  $20,000 decrease 
D)  $10,000 decrease

Question 12

Which of the following is an external user of accounting information?

Accepted Answer

A)  Labor unions 
B)  Finance directors 
C)  Company officers 
D)  Managers 
A)  Labor unions 
B)  Finance directors 
C)  Company officers 
D)  Managers

Question 13

The proprietorship form of business organization

Accepted Answer

A)  must have at least three owners in most states. 
B)  represents the largest number of businesses in the United States. 
C)  combines the records of the business with the personal records of the owner. 
D)  is characterized by a legal distinction between the business as an economic unit and the owner. 
A)  must have at least three owners in most states. 
B)  represents the largest number of businesses in the United States. 
C)  combines the records of the business with the personal records of the owner. 
D)  is characterized by a legal distinction between the business as an economic unit and the owner.

Question 14

A common set of standards that provides guidelines to accountants and indicates how to report economic events is called _________________.

Accepted Answer

generally

Question 15

Financial accounting provides economic and financial information for all of the following except

Accepted Answer

A)  creditors. 
B)  investors. 
C)  managers. 
D)  other external users. 
A)  creditors. 
B)  investors. 
C)  managers. 
D)  other external users.

Question 16

Two items are omitted from each of the following summaries of balance sheet and income
statement data for two proprietorships for the year 2010, Holly Enterprises and Craig Stevens.   
Instructions
Determine the missing amounts.

Accepted Answer

The answer of Two items are omitted from each of...

Question 17

Net income for the period is determined by subtracting total expenses and drawings from total revenues.

Accepted Answer

A) True 
 B)False

Question 18

Internal users of accounting information include all of the following except

Accepted Answer

A)  company officers. 
B)  investors. 
C)  marketing managers. 
D)  production supervisors. 
A)  company officers. 
B)  investors. 
C)  marketing managers. 
D)  production supervisors.

Question 19

An analysis of the transactions made by K. T. Lang & Co., a law firm, for the month of July is shown below. Each increase and decrease in owner's equity is explained.   
Instructions
(a) Prepare an income statement for the month ending July 31, 2010.
(b) Prepare an owner's equity statement for the month ending July 31, 2010.

Accepted Answer

The answer of An analysis of the transactions made by...

Question 20

The residual claim on total assets of a business is known as ________________ and is equal to total assets minus total liabilities.

Accepted Answer

The answer of The residual claim on total assets of...

Exam 1: Accounting in Action

Listed below in alphabetical order are the balance sheet items of Rowan Company at December 31, 2009. Prepare a balance sheet and include a complete heading.

Which of the following is not an advantage of the corporate form of business organization?

A net loss will result during a time period when

Accountants who are employees of business enterprises are referred to as ________________ accountants.

The economic entity assumption requires that the activities

Revenues would not result from

A balance sheet shows

If an owner makes a withdrawal of cash from a proprietorship, then

An income statement

If total liabilities decreased by $15,000 and owner's equity decreased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

Which of the following is an external user of accounting information?

The proprietorship form of business organization

A common set of standards that provides guidelines to accountants and indicates how to report economic events is called _________________.

Financial accounting provides economic and financial information for all of the following except

Two items are omitted from each of the following summaries of balance sheet and income statement data for two proprietorships for the year 2010, Holly Enterprises and Craig Stevens. Instructions Determine the missing amounts.

Net income for the period is determined by subtracting total expenses and drawings from total revenues.

Internal users of accounting information include all of the following except

The residual claim on total assets of a business is known as ________________ and is equal to total assets minus total liabilities.

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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