Question 1

A company borrows $125,000 from the Northern Bank and receives the loan proceeds in cash. This represents a(n):

Accepted Answer

A) Operating activity. 
B) Financing activity. 
C) Investing activity. 
D) Revenue activity. 
E) Expense activity. 
A) Operating activity. 
B) Financing activity. 
C) Investing activity. 
D) Revenue activity. 
E) Expense activity.

Question 2

Which of the following purposes would financial statements serve for external users?

Accepted Answer

A) To determine purchasing needs. 
B) To fulfill regulatory requirements for companies whose stock is sold to the public. 
C) To assess employee performance and compensation. 
D) To find information about projected costs and revenues of proposed products. 
E) To assist in monitoring consumer needs and price concerns. 
A) To determine purchasing needs. 
B) To fulfill regulatory requirements for companies whose stock is sold to the public. 
C) To assess employee performance and compensation. 
D) To find information about projected costs and revenues of proposed products. 
E) To assist in monitoring consumer needs and price concerns.

Question 3

A company's balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

Accepted Answer

A) $176,000. 
B) $68,000. 
C) $32,000. 
D) $76,000. 
E) $104,000. 
A) $176,000. 
B) $68,000. 
C) $32,000. 
D) $76,000. 
E) $104,000.

Question 4

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Accepted Answer

A) True 
 B)False

Question 5

The characteristics below apply to at least one of the forms of business organization.
a. Is a separate legal entity.
b. Is allowed to be owned by one person only.
c. Owner or owners are personally liable for debts of the business.
d. Is a separately taxable entity.
e. Is a business entity.
f. May have a contract specifying the division of profits among the owners.
g. Has an unlimited life
Use the following format to indicate (with a "yes" or "no")whether or not a characteristic applies to each type of business organization.
 $$\begin{array} { | l | l | l | l | } 
\hline & \text { Proprietorship } & \text { Partnership } & \text { Corporation } \
\hline \text { a. } & & & \
\hline \text { b. } & & & \
\hline \text { c. } & & & \
\hline \text { d. } & & & \
\hline \text { e. } & & & \
\hline \text { f. } & & & \
\hline \text { g. } & & & \
\hline
\end{array}$$

Accepted Answer

The answer of The characteristics below apply to at least...

Question 6

Cornelia's Closet has the following account balances for the dates given:
 $\begin{array}{rr}
&\text { October 1 } & \text { October 31 } \
\hline \text { Cash...... }&\$ 40,000 & 60,000 \
\text { Accounts Receivable }&40,000 & 38,000 \
\text { Accounts payable }&6,000 & ?
\end{array}$ 
Also, its net income, for October 1 through October 31 was $20,000 and there were no investments or withdrawals by the owner. Determine the equity at both October 1 and October 31.

Accepted Answer

October 1st Equity =

Question 7

The statement of owner's equity:

Accepted Answer

A) Reports how equity changes over a period of time. 
B) Reports on cash flows for operating, financing, and investing activities at a point in time. 
C) Reports on cash flows for operating, financing, and investing activities over a period of time. 
D) Reports on amounts for assets, liabilities, and equity at a point in time. 
E) Reports how equity changes at a point in time. 
A) Reports how equity changes over a period of time. 
B) Reports on cash flows for operating, financing, and investing activities at a point in time. 
C) Reports on cash flows for operating, financing, and investing activities over a period of time. 
D) Reports on amounts for assets, liabilities, and equity at a point in time. 
E) Reports how equity changes at a point in time.

Question 8

Identify the three basic forms of business organizations and their key attributes.

Accepted Answer

The three basic forms of business organi

Question 9

An example of an operating activity is:

Accepted Answer

A) Purchasing office equipment. 
B) Selling stock. 
C) Paying wages. 
D) Paying off a loan. 
E) Borrowing money from a bank. 
A) Purchasing office equipment. 
B) Selling stock. 
C) Paying wages. 
D) Paying off a loan. 
E) Borrowing money from a bank.

Question 10

Technology:

Accepted Answer

A) Reduces the time, effort and cost of recordkeeping. 
B) In accounting is only available to large corporations. 
C) Has not improved the clerical accuracy of accounting. 
D) Has replaced accounting. 
E) In accounting has replaced the need for decision makers. 
A) Reduces the time, effort and cost of recordkeeping. 
B) In accounting is only available to large corporations. 
C) Has not improved the clerical accuracy of accounting. 
D) Has replaced accounting. 
E) In accounting has replaced the need for decision makers.

Question 11

How does the objectivity principle support ethical behavior?

Accepted Answer

The objectivity principle supports ethic

Question 12

Owner's investments are increases in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 13

The monetary assumption:

Accepted Answer

A) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold. 
B) 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. 
C) Means that we can express transactions and events in monetary, or money, units. 
D) Prescribes that a company record the expenses it incurred to generate the revenue reported. 
E) Means that a business is accounted for separately from other business entities, including its owner. 
A) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold. 
B) 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. 
C) Means that we can express transactions and events in monetary, or money, units. 
D) Prescribes that a company record the expenses it incurred to generate the revenue reported. 
E) Means that a business is accounted for separately from other business entities, including its owner.

Question 14

The Sarbanes-Oxley Act (SOX)requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Accepted Answer

A) True 
 B)False

Question 15

A limited liability company offers the limited liability of a corporation and the tax treatment of a partnership or proprietorship.

Accepted Answer

A) True 
 B)False

Question 16

Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long-used accounting practice.

Accepted Answer

A) True 
 B)False

Question 17

Determine the net income of a company for which the following information is available for the month of July. $\begin{array}{lr}
\text { Employee salaries expense } & \$ 180,000 \
\text { Interest expense } & 10,000 \
\text { Rent expense } & 20,000 \
\text { Consulting revenue } & 400,000
\end{array}$

Accepted Answer

A) $400,000. 
B) $230,000. 
C) $210,000. 
D) $610,000. 
E) $190,000. 
A) $400,000. 
B) $230,000. 
C) $210,000. 
D) $610,000. 
E) $190,000.

Question 18

Describe the three important guidelines for revenue recognition.

Accepted Answer

The three important guidelines for reven

Question 19

The three common forms of business ownership include sole proprietorship, partnership, and corporation.

Accepted Answer

A) True 
 B)False

Question 20

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease? By what amount?

Accepted Answer

Assets inc

A company borrows $125,000 from the Northern Bank and receives the loan proceeds in cash. This represents a(n):

Which of the following purposes would financial statements serve for external users?

A company's balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

The statement of owner's equity:

Identify the three basic forms of business organizations and their key attributes.

An example of an operating activity is:

Technology:

How does the objectivity principle support ethical behavior?

Owner's investments are increases in equity from a company's earnings activities.

The monetary assumption:

The Sarbanes-Oxley Act (SOX)requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

A limited liability company offers the limited liability of a corporation and the tax treatment of a partnership or proprietorship.

Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long-used accounting practice.

Determine the net income of a company for which the following information is available for the month of July. Employee salaries expense \ 180,000 Interest expense 10,000 Rent expense 20,000 Consulting revenue 400,000

Describe the three important guidelines for revenue recognition.

The three common forms of business ownership include sole proprietorship, partnership, and corporation.

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease? By what amount?

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

Exam 1: Accounting in Business

A company borrows $125,000 from the Northern Bank and receives the loan proceeds in cash. This represents a(n):

Which of the following purposes would financial statements serve for external users?

A company's balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

The statement of owner's equity:

Identify the three basic forms of business organizations and their key attributes.

An example of an operating activity is:

Technology:

How does the objectivity principle support ethical behavior?

Owner's investments are increases in equity from a company's earnings activities.

The monetary assumption:

The Sarbanes-Oxley Act (SOX)requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

A limited liability company offers the limited liability of a corporation and the tax treatment of a partnership or proprietorship.

Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long-used accounting practice.

Determine the net income of a company for which the following information is available for the month of July. Employee salaries expense \ 180,000 Interest expense 10,000 Rent expense 20,000 Consulting revenue 400,000

Describe the three important guidelines for revenue recognition.

The three common forms of business ownership include sole proprietorship, partnership, and corporation.

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease? By what amount?

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