Question 1

All of the following are classified as liabilities except:

Accepted Answer

A) Wages Payable. 
B) Accounts Payable. 
C) Taxes Payable. 
D) Notes Payable. 
E) Accounts Receivable. 
A) Wages Payable. 
B) Accounts Payable. 
C) Taxes Payable. 
D) Notes Payable. 
E) Accounts Receivable. E

Question 2

An example of an investing activity is:

Accepted Answer

A) Selling inventory. 
B) Paying wages of employees. 
C) Withdrawals by the owner. 
D) Contribution from owner. 
E) Purchase of land. 
A) Selling inventory. 
B) Paying wages of employees. 
C) Withdrawals by the owner. 
D) Contribution from owner. 
E) Purchase of land. E

Question 3

Internal users include lenders, shareholders, brokers and nonexecutive employees.

Accepted Answer

A) True 
 B)False  False

Question 4

A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

Accepted Answer

$570,000. The Measurement (Cos

Question 5

A balance sheet lists:

Accepted Answer

A) The inflows and outflows of cash during the period. 
B) The types and amounts of assets, liabilities, and equity of a business as of a specific date. 
C) Only the information about what happened to equity during a time period. 
D) The assets and liabilities of a company but not the owner's equity. 
E) The types and amounts of the revenues and expenses of a business. 
A) The inflows and outflows of cash during the period. 
B) The types and amounts of assets, liabilities, and equity of a business as of a specific date. 
C) Only the information about what happened to equity during a time period. 
D) The assets and liabilities of a company but not the owner's equity. 
E) The types and amounts of the revenues and expenses of a business.

Question 6

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Accepted Answer

A) Assets increase $4,500 and liabilities decrease $4,500. 
B) Assets increase $4,500 and liabilities increase $4,500. 
C) Equity decreases $4,500 and liabilities increase $4,500. 
D) Equity increases $4,500 and liabilities decrease $4,500. 
E) Liabilities decrease $4,500 and assets increase $4,500. 
A) Assets increase $4,500 and liabilities decrease $4,500. 
B) Assets increase $4,500 and liabilities increase $4,500. 
C) Equity decreases $4,500 and liabilities increase $4,500. 
D) Equity increases $4,500 and liabilities decrease $4,500. 
E) Liabilities decrease $4,500 and assets increase $4,500.

Question 7

Resources a company owns or controls that are expected to yield future benefits are:

Accepted Answer

A) Revenues. 
B) Liabilities. 
C) Owner's Equity. 
D) Expenses. 
E) Assets. 
A) Revenues. 
B) Liabilities. 
C) Owner's Equity. 
D) Expenses. 
E) Assets.

Question 8

Generally, the lower the risk, the higher the return that can be expected.

Accepted Answer

A) True 
 B)False

Question 9

Contessa Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

Accepted Answer

A) Total assets increase and equity decreases. 
B) Total assets decrease and equity increases. 
C) Total assets, total liabilities, and total equity are unchanged. 
D) Both total assets and equity are unchanged and liabilities increase. 
E) Both total assets and total liabilities decrease. 
A) Total assets increase and equity decreases. 
B) Total assets decrease and equity increases. 
C) Total assets, total liabilities, and total equity are unchanged. 
D) Both total assets and equity are unchanged and liabilities increase. 
E) Both total assets and total liabilities decrease.

Question 10

Arrow's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%.

Accepted Answer

A) True 
 B)False

Question 11

A resource that the owner takes from the company is called a(n):

Accepted Answer

A) Investment. 
B) Liability. 
C) Contribution. 
D) Withdrawal. 
E) Expense. 
A) Investment. 
B) Liability. 
C) Contribution. 
D) Withdrawal. 
E) Expense.

Question 12

Explain the role of accounting in the information age.

Accepted Answer

Accounting is an information and measure

Question 13

Saddleback Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

Accepted Answer

A) Assets, $30,000 decrease; liabilities, $30,000 increase. 
B) Assets, $30,000 decrease; equity $30,000 decrease. 
C) Assets, $30,000 increase; equity, $30,000 increase. 
D) Liabilities, $30,000 decrease; equity, $30,000 increase. 
E) Assets, $30,000 decrease; liabilities, $30,000 decrease. 
A) Assets, $30,000 decrease; liabilities, $30,000 increase. 
B) Assets, $30,000 decrease; equity $30,000 decrease. 
C) Assets, $30,000 increase; equity, $30,000 increase. 
D) Liabilities, $30,000 decrease; equity, $30,000 increase. 
E) Assets, $30,000 decrease; liabilities, $30,000 decrease.

Question 14

External users include lenders, shareholders, customers, and regulators.

Accepted Answer

A) True 
 B)False

Question 15

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:

Accepted Answer

A) Decreased $105,000. 
B) Decreased $45,000. 
C) Increased $105,000. 
D) Increased $45,000. 
E) Increased $30,000. 
A) Decreased $105,000. 
B) Decreased $45,000. 
C) Increased $105,000. 
D) Increased $45,000. 
E) Increased $30,000.

Question 16

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:

Accepted Answer

A) A decrease of $80,000. 
B) An increase of $25,000. 
C) An increase of $30,000. 
D) A decrease of $30,000. 
E) An increase of $80,000. 
A) A decrease of $80,000. 
B) An increase of $25,000. 
C) An increase of $30,000. 
D) A decrease of $30,000. 
E) An increase of $80,000.

Question 17

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Accepted Answer

A) True 
 B)False

Question 18

The conceptual framework that the Financial Accounting Standards Board (FASB)and the International Accounting Standards Board (IASB)are attempting to converge and enhance includes the following broad areas to guide standard setting except:

Accepted Answer

A) Uniformity 
B) Recognition and measurement 
C) Objectives 
D) Qualitative characteristics 
E) Elements 
A) Uniformity 
B) Recognition and measurement 
C) Objectives 
D) Qualitative characteristics 
E) Elements

Question 19

Identify the users and uses of accounting information.

Accepted Answer

There are two general types of users of

Question 20

An income statement reports on investing and financing activities.

Accepted Answer

A) True 
 B)False

All of the following are classified as liabilities except:

An example of an investing activity is:

Internal users include lenders, shareholders, brokers and nonexecutive employees.

A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

A balance sheet lists:

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Resources a company owns or controls that are expected to yield future benefits are:

Generally, the lower the risk, the higher the return that can be expected.

Contessa Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

Arrow's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%.

A resource that the owner takes from the company is called a(n):

Explain the role of accounting in the information age.

Saddleback Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

External users include lenders, shareholders, customers, and regulators.

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

The conceptual framework that the Financial Accounting Standards Board (FASB)and the International Accounting Standards Board (IASB)are attempting to converge and enhance includes the following broad areas to guide standard setting except:

Identify the users and uses of accounting information.

An income statement reports on investing and financing activities.

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

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Exam 1: Accounting in Business

All of the following are classified as liabilities except:

An example of an investing activity is:

Internal users include lenders, shareholders, brokers and nonexecutive employees.

A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

A balance sheet lists:

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Resources a company owns or controls that are expected to yield future benefits are:

Generally, the lower the risk, the higher the return that can be expected.

Contessa Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

Arrow's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%.

A resource that the owner takes from the company is called a(n):

Explain the role of accounting in the information age.

Saddleback Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

External users include lenders, shareholders, customers, and regulators.

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

The conceptual framework that the Financial Accounting Standards Board (FASB)and the International Accounting Standards Board (IASB)are attempting to converge and enhance includes the following broad areas to guide standard setting except:

Identify the users and uses of accounting information.

An income statement reports on investing and financing activities.

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Filters