Question 1

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Accepted Answer

A) True 
 B)False

Question 2

Operating activities:

Accepted Answer

A) Are also called strategic management. 
B) Are the means organizations use to pay for resources like land, buildings and equipment. 
C) Are also called asset management. 
D) Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services. 
E) Involve using resources to research, develop, purchase, produce, distribute and market products and services. 
A) Are also called strategic management. 
B) Are the means organizations use to pay for resources like land, buildings and equipment. 
C) Are also called asset management. 
D) Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services. 
E) Involve using resources to research, develop, purchase, produce, distribute and market products and services.

Question 3

A net loss occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 4

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Accepted Answer

A) True 
 B)False

Question 5

If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by the purchaser as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at:

Accepted Answer

A) $140,000. 
B) $137,000. 
C) $150,000. 
D) $138,500. 
E) $95,000. 
A) $140,000. 
B) $137,000. 
C) $150,000. 
D) $138,500. 
E) $95,000.

Question 6

Another name for equity is:

Accepted Answer

A) Expenses. 
B) Net assets. 
C) Net loss. 
D) Net income. 
E) Revenue. 
A) Expenses. 
B) Net assets. 
C) Net loss. 
D) Net income. 
E) Revenue.

Question 7

Use the following information for Meeker Corp. to determine the amount of equity to report. $\begin{array}{lr}
\text { Cash } & \$ 70,000 \
\text { Buildings } & 125,000 \
\text { Land } & 205,000 \
\text { Liabilities } & 130,000
\end{array}$

Accepted Answer

A) $530,000. 
B) $140,000. 
C) $20,000. 
D) $270,000. 
E) $390,000. 
A) $530,000. 
B) $140,000. 
C) $20,000. 
D) $270,000. 
E) $390,000.

Question 8

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Accepted Answer

A) Expense recognition (Matching)principle.. 
B) Measurement (Cost)principle. 
C) Consideration assumption. 
D) Going-concern assumption. 
E) Business entity assumption. 
A) Expense recognition (Matching)principle.. 
B) Measurement (Cost)principle. 
C) Consideration assumption. 
D) Going-concern assumption. 
E) Business entity assumption.

Question 9

Liabilities are the owner's claim on assets.

Accepted Answer

A) True 
 B)False

Question 10

Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA)is:

Accepted Answer

A) 3.5%. 
B) 17.5%. 
C) 35%. 
D) 1.8%. 
E) 5.7%. 
A) 3.5%. 
B) 17.5%. 
C) 35%. 
D) 1.8%. 
E) 5.7%.

Question 11

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

Accepted Answer

A) Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000. 
B) Assets would decrease $38,000, liabilities would decrease $38,000, and equity remains unchanged. 
C) Assets would increase $38,000 and liabilities would decrease $38,000. 
D) There would be no effect on the accounts because the accounts are affected by the same amount. 
E) Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000. 
A) Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000. 
B) Assets would decrease $38,000, liabilities would decrease $38,000, and equity remains unchanged. 
C) Assets would increase $38,000 and liabilities would decrease $38,000. 
D) There would be no effect on the accounts because the accounts are affected by the same amount. 
E) Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000.

Question 12

Match between columns
                        Premises: Assess whether an organization is likely to repay its loans with interest.
Decide whether to buy, hold, or sell a company's stock.
Assess whether a company has paid all required taxes and complied with securities rules.
Know what, when, and how much to purchase.
Judge the soundness of a customer before making sales on credit.

Accepted Answer

The Answer of Purchasing Managers and Regulators and Lenders and is...

Question 13

How does the going-concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f

Question 14

The balance sheet is based on the accounting equation.

Accepted Answer

A) True 
 B)False

Question 15

The going concern assumption:

Accepted Answer

A) Means that we can express transactions and events in monetary, or money, units. 
B) Means that a business is accounted for separately from other business entities, including its owner. 
C) Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods. 
D) Prescribes that a company record the expenses it incurred to generate the revenue reported. 
E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold. 
A) Means that we can express transactions and events in monetary, or money, units. 
B) Means that a business is accounted for separately from other business entities, including its owner. 
C) Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods. 
D) Prescribes that a company record the expenses it incurred to generate the revenue reported. 
E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Question 16

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 17

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000, and withdrawals by the owner of $12,000. The owner made no investments during the year. Calculate the ending equity.

Accepted Answer

A) $29,000. 
B) $(5,000). 
C) $75,000. 
D) $5,000. 
E) $99,000. 
A) $29,000. 
B) $(5,000). 
C) $75,000. 
D) $5,000. 
E) $99,000.

Question 18

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 19

The income statement shows the financial position of a business on a specific date.

Accepted Answer

A) True 
 B)False

Question 20

The International Accounting Standards board (IASB)has the authority to impose its standards on companies around the world.

Accepted Answer

A) True 
 B)False

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Operating activities:

A net loss occurs when revenues exceed expenses.

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Another name for equity is:

Use the following information for Meeker Corp. to determine the amount of equity to report. Cash \ 70,000 Buildings 125,000 Land 205,000 Liabilities 130,000

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Liabilities are the owner's claim on assets.

Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA)is:

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

How does the going-concern principle affect reporting asset values of a business?

The balance sheet is based on the accounting equation.

The going concern assumption:

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000, and withdrawals by the owner of $12,000. The owner made no investments during the year. Calculate the ending equity.

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

The income statement shows the financial position of a business on a specific date.

The International Accounting Standards board (IASB)has the authority to impose its standards on companies around the world.

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

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Operating activities:

A net loss occurs when revenues exceed expenses.

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Another name for equity is:

Use the following information for Meeker Corp. to determine the amount of equity to report. Cash \ 70,000 Buildings 125,000 Land 205,000 Liabilities 130,000

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Liabilities are the owner's claim on assets.

Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA)is:

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

How does the going-concern principle affect reporting asset values of a business?

The balance sheet is based on the accounting equation.

The going concern assumption:

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000, and withdrawals by the owner of $12,000. The owner made no investments during the year. Calculate the ending equity.

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

The income statement shows the financial position of a business on a specific date.

The International Accounting Standards board (IASB)has the authority to impose its standards on companies around the world.

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