Question 1

Which of the following is not a business transaction?

Accepted Answer

A) make a sales offer 
B) sell goods for cash 
C) receive cash for services to be rendered later 
D) pay for supplies 
A) make a sales offer 
B) sell goods for cash 
C) receive cash for services to be rendered later 
D) pay for supplies

Question 2

Revenues for the year totaled $162,000 and expenses totaled $174,000. The stockholders purchased $15,000 of common stock and were paid $6,000 in dividends during the year. What was the net income or net loss for the year?

Accepted Answer

A) $12,000 net income 
B) $12,000 net loss 
C) $18,000 net loss 
D) $6,000 net loss 
A) $12,000 net income 
B) $12,000 net loss 
C) $18,000 net loss 
D) $6,000 net loss

Question 3

Daniels Company made the following selected transactions during May:
1.Received cash from sale of stock, $55,000
2.Paid creditors on account, $7,000
3.Billed customers for services on account, $2,565
4.Received cash from customers on account, $8,450
5.Paid dividends to stockholders, $2,500
6.Received the utility bill, $160, to be paid next month
Indicate the effect of each transaction on the accounting equation by:
(a)Account type - (A)assets, (L)liabilities, (SE)stockholders' equity, (R)revenue, and (E)expense
b)Name of account
c)The amount by of the transaction
d)The direction of change (increase or decrease) in the account affected
Note: Each transaction has two entries.

Accepted Answer

The answer of Daniels Company made the following selected transactions...

Question 4

The business entity assumption means that

Accepted Answer

A) the owner is part of the business entity 
B) an entity is organized according to state or federal statutes 
C) an entity is organized according to the rules set by the FASB 
D) the entity is an individual economic unit for which data are recorded, analyzed, and reported 
A) the owner is part of the business entity 
B) an entity is organized according to state or federal statutes 
C) an entity is organized according to the rules set by the FASB 
D) the entity is an individual economic unit for which data are recorded, analyzed, and reported

Question 5

On May 20, White Repair Service extended an offer of $108,000 for land that had been priced for sale at $140,000. On May 30, White Repair Service accepted the seller's counteroffer of $115,000. On June 20, the land was assessed at a value of $95,000 for property tax purposes. On July 4, White Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in White Repair Service's records?

Accepted Answer

A) $108,000 
B) $95,000 
C) $140,000 
D) $115,000 
A) $108,000 
B) $95,000 
C) $140,000 
D) $115,000

Question 6

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

Accepted Answer

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

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.

Accepted Answer

A) True 
 B)False

Question 9

The primary financial statements of a corporation are the income statement, the statement of stockholders' equity, and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 10

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Provided a service to a customer on account
A)Increase assets, increase liabilities
B)Increase liabilities, decrease stockholders' equity
C)Increase assets, increase stockholders' equity
D)No effect
E)Decrease assets, decrease liabilities
F)Decrease assets, decrease stockholders' equity

Accepted Answer

The answer of Match each transaction with its effect on...

Question 11

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once.
-Owned by two or more individuals
A)Proprietorship
B)Partnership
C)Corporation
D)Limited liability company (LLC)

Accepted Answer

The answer of Match the following characteristics with the form...

Question 12

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 year, is called a(n)

Accepted Answer

A) prior period statement 
B) statement of stockholders' equity 
C) income statement 
D) balance sheet 
A) prior period statement 
B) statement of stockholders' equity 
C) income statement 
D) balance sheet

Question 13

The rights of owners in a corporation are referred to as

Accepted Answer

A) proprietor's equity 
B) stockholder's equity 
C) dividends 
D) equity in assets 
A) proprietor's equity 
B) stockholder's equity 
C) dividends 
D) equity in assets

Question 14

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's resources are limited to its individual owners' resources. 
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's resources are limited to its individual owners' resources.

Question 15

Computer Corporation is starting its computer programming business and has sold stock of $15,000. Identify how the accounting equation will be affected.

Accepted Answer

A) increase in assets (Cash) and increase in liabilities (Accounts Payable) 
B) increase in assets (Cash) and increase in stockholders' equity (Common Stock) 
C) increase in assets (Accounts Receivable) and decrease in liabilities (Accounts Payable) 
D) increase in assets (Cash) and increase in assets (Accounts Receivable) 
A) increase in assets (Cash) and increase in liabilities (Accounts Payable) 
B) increase in assets (Cash) and increase in stockholders' equity (Common Stock) 
C) increase in assets (Accounts Receivable) and decrease in liabilities (Accounts Payable) 
D) increase in assets (Cash) and increase in assets (Accounts Receivable)

Question 16

Any twelve-month accounting period adopted by a company is known as its fiscal year.

Accepted Answer

A) True 
 B)False

Question 17

Proper ethical conduct implies that you only consider what's in your best interest.

Accepted Answer

A) True 
 B)False

Question 18

At the beginning of the year, Winton Company's assets were $180,000 and its stockholders' equity was $82,000. During the year, assets increased by $25,000 and liabilities increased by $9,000. What was the stockholders' equity at the end of the year?

Accepted Answer

A) $107,000 
B) $98,000 
C) $114,000 
D) $116,000 
A) $107,000 
B) $98,000 
C) $114,000 
D) $116,000

Question 19

The assets and liabilities of Rocky's Day Spa at December 31 and expenses for the year are listed below. The stockholders' equity was $68,000 ($48,000 in Common Stock and $20,000 in Retained Earnings) at January 1. The shareholders invested in an additional $10,000 of common stock during the year. Net income for the year is $45,625.   Prepare a balance sheet for Rocky's Day Spa for the year ended December 31.

Accepted Answer

The answer of The assets and liabilities of Rocky's Day...

Question 20

Karen Meyer owns and operates Crystal Cleaning Company. Recently, Meyer withdrew $10,000 from Crystal Cleaning, and she contributed $6,000, in her name, to the American Red Cross. The contribution of the $6,000 should be recorded on the accounting records of which of the following entities?

Accepted Answer

A) Crystal Cleaning and the American Red Cross 
B) Karen Meyer's personal records and the American Red Cross 
C) Karen Meyer's personal records and Crystal Cleaning 
D) Karen Meyer's personal records, Crystal Cleaning, and the American Red Cross 
A) Crystal Cleaning and the American Red Cross 
B) Karen Meyer's personal records and the American Red Cross 
C) Karen Meyer's personal records and Crystal Cleaning 
D) Karen Meyer's personal records, Crystal Cleaning, and the American Red Cross

Exam 1: Introduction to Accounting and Business

Which of the following is not a business transaction?

Revenues for the year totaled $162,000 and expenses totaled $174,000. The stockholders purchased $15,000 of common stock and were paid $6,000 in dividends during the year. What was the net income or net loss for the year?

The business entity assumption means that

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

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

Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.

The primary financial statements of a corporation are the income statement, the statement of stockholders' equity, and the balance sheet.

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Owned by two or more individuals A)Proprietorship B)Partnership C)Corporation D)Limited liability company (LLC)

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 year, is called a(n)

The rights of owners in a corporation are referred to as

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

Computer Corporation is starting its computer programming business and has sold stock of $15,000. Identify how the accounting equation will be affected.

Any twelve-month accounting period adopted by a company is known as its fiscal year.

Proper ethical conduct implies that you only consider what's in your best interest.

At the beginning of the year, Winton Company's assets were $180,000 and its stockholders' equity was $82,000. During the year, assets increased by $25,000 and liabilities increased by $9,000. What was the stockholders' equity at the end of the year?

Karen Meyer owns and operates Crystal Cleaning Company. Recently, Meyer withdrew $10,000 from Crystal Cleaning, and she contributed $6,000, in her name, to the American Red Cross. The contribution of the $6,000 should be recorded on the accounting records of which of the following entities?

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

Filters