Question 1

According to the measurement (cost)principle, it is necessary for managers to report an approximation of an asset's market value upon purchase.

Accepted Answer

A) True 
 B)False

Question 2

Billington Corp. borrows $80,000 cash from Second National Bank. How does this transaction affect the accounting equation for Billington?

Accepted Answer

A) Assets would increase $80,000 and equity would decrease $80,000. 
B) Assets would decrease $80,000 and equity would increase $80,000. 
C) Assets would decrease $80,000 and liabilities would decrease $80,000. 
D) Liabilities would decrease $80,000 and equity would increase $80,000. 
E) Assets would increase $80,000 and liabilities would increase $80,000. 
A) Assets would increase $80,000 and equity would decrease $80,000. 
B) Assets would decrease $80,000 and equity would increase $80,000. 
C) Assets would decrease $80,000 and liabilities would decrease $80,000. 
D) Liabilities would decrease $80,000 and equity would increase $80,000. 
E) Assets would increase $80,000 and liabilities would increase $80,000.

Question 3

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?

Accepted Answer

A) Assets would increase $1,750 and equity would increase $1,750. 
B) Liabilities would decrease $1,750 and equity would increase $1,750. 
C) One asset would increase $1,750 and a different asset would decrease $1,750, causing no net change in the accounting equation. 
D) Assets would decrease $1,750 and liabilities would decrease $1,750. 
E) Assets would increase $1,750 and liabilities would increase $1,750. 
A) Assets would increase $1,750 and equity would increase $1,750. 
B) Liabilities would decrease $1,750 and equity would increase $1,750. 
C) One asset would increase $1,750 and a different asset would decrease $1,750, causing no net change in the accounting equation. 
D) Assets would decrease $1,750 and liabilities would decrease $1,750. 
E) Assets would increase $1,750 and liabilities would increase $1,750.

Question 4

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Accepted Answer

A) Going-concern assumption. 
B) Business entity assumption. 
C) Objectivity principle. 
D) Revenue recognition principle. 
E) Monetary unit assumption. 
A) Going-concern assumption. 
B) Business entity assumption. 
C) Objectivity principle. 
D) Revenue recognition principle. 
E) Monetary unit assumption.

Question 5

Marsha Bogswell is the owner of Bogswell Legal Services. Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

Accepted Answer

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

Question 6

Describe the three types of activities reported on the statement of cash flows.

Accepted Answer

The three types of activities reported i

Question 7

The basic financial statements include all of the following except:

Accepted Answer

A) Income Statement. 
B) Statement of Owner's Equity. 
C) Statement of Cash Flows. 
D) Statement of Changes in Assets. 
E) Balance Sheet. 
A) Income Statement. 
B) Statement of Owner's Equity. 
C) Statement of Cash Flows. 
D) Statement of Changes in Assets. 
E) Balance Sheet.

Question 8

The accounts of Odie Company with the increases or decreases that occurred during the past year are as follows:
 $$\begin{array} { l c c } 
\text { Account } & \text { Increase } & \text { Decrease } \
\hline \text { Cash } & \$ 25,000 & \
\text { Accounts receivable } & & \$ ( 5,000 ) \
\text { Accounts payable } & & ( 11,000 ) \
\text { Notes payable } & 16,000 &
\end{array}$$ 
Except for net income, an investment of $3,000 by the owner, and a withdrawal of $11,000 by the owner, no other items affected owner's equity. Using the balance sheet equation, compute net income for the past year.

Accepted Answer

The answer of The accounts of Odie Company with the...

Question 9

The assets of a company total $700,000; the liabilities, $200,000. What are the net assets?

Accepted Answer

A) $500,000. 
B) $900,000. 
C) $200,000. 
D) It is impossible to determine unless the amount of this owners' investment is known. 
E) $700,000. 
A) $500,000. 
B) $900,000. 
C) $200,000. 
D) It is impossible to determine unless the amount of this owners' investment is known. 
E) $700,000.

Question 10

What distinguishes liabilities from equity?

Accepted Answer

Liabilities are creditors' claims on ass

Question 11

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?

Accepted Answer

A) Assets would increase $2,000 and equity would increase $2,000. 
B) Liabilities would decrease $2,000 and equity would increase $2,000. 
C) Assets would decrease $2,000 and equity would decrease $2,000. 
D) Assets would increase $2,000 and liabilities would increase $2,000. 
E) Assets would decrease $2,000 and liabilities would decrease $2,000. 
A) Assets would increase $2,000 and equity would increase $2,000. 
B) Liabilities would decrease $2,000 and equity would increase $2,000. 
C) Assets would decrease $2,000 and equity would decrease $2,000. 
D) Assets would increase $2,000 and liabilities would increase $2,000. 
E) Assets would decrease $2,000 and liabilities would decrease $2,000.

Question 12

Risk is:

Accepted Answer

A) Derived from the idea of getting something back from an investment. 
B) The reward for investment. 
C) The uncertainty about the return expected to be earned. 
D) Unrelated to return expected. 
E) Net income divided by average total assets. 
A) Derived from the idea of getting something back from an investment. 
B) The reward for investment. 
C) The uncertainty about the return expected to be earned. 
D) Unrelated to return expected. 
E) Net income divided by average total assets.

Question 13

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Accepted Answer

A) SEC. 
B) AAA. 
C) AICPA. 
D) APB. 
E) FASB. 
A) SEC. 
B) AAA. 
C) AICPA. 
D) APB. 
E) FASB.

Question 14

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Accepted Answer

A) True 
 B)False

Question 15

A limited partnership:

Accepted Answer

A) Is subject to double taxation. 
B) Includes a general partner with unlimited liability. 
C) May only have two partners. 
D) Is the same as a corporation. 
E) Has owners called stockholders. 
A) Is subject to double taxation. 
B) Includes a general partner with unlimited liability. 
C) May only have two partners. 
D) Is the same as a corporation. 
E) Has owners called stockholders.

Question 16

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

Accepted Answer

A) True 
 B)False

Question 17

Match between columns
                        Premises: The uncertainty about the return to be earned.
Resources such as cash that an owner takes from the company for personal use.
Resources such as cash that an owner puts into the company.
Expresses the relation of assets, liabilities and equity in a company, comparing the resources the company owns to the sources of funds to acquire the resources.
Resources a company owns or controls that are expected to yield future benefit.
Decreases in equity from costs of providing products or services to customers.
Creditor's claims on a company's assets.
A financial ratio stated as income divided by assets invested.

Accepted Answer

The Answer of Liabilities and Expenses and Accounting equation and is...

Question 18

An owner's investment increases equity via net income.

Accepted Answer

A) True 
 B)False

Question 19

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 20

If equity is $300,000 and liabilities are $192,000, then assets equal:

Accepted Answer

A) $300,000. 
B) $792,000. 
C) $192,000. 
D) $492,000. 
E) $108,000. 
A) $300,000. 
B) $792,000. 
C) $192,000. 
D) $492,000. 
E) $108,000.

According to the measurement (cost)principle, it is necessary for managers to report an approximation of an asset's market value upon purchase.

Billington Corp. borrows $80,000 cash from Second National Bank. How does this transaction affect the accounting equation for Billington?

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Marsha Bogswell is the owner of Bogswell Legal Services. Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

Describe the three types of activities reported on the statement of cash flows.

The basic financial statements include all of the following except:

The assets of a company total $700,000; the liabilities, $200,000. What are the net assets?

What distinguishes liabilities from equity?

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?

Risk is:

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

A limited partnership:

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

An owner's investment increases equity via net income.

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

If equity is $300,000 and liabilities are $192,000, then assets equal:

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

According to the measurement (cost)principle, it is necessary for managers to report an approximation of an asset's market value upon purchase.

Billington Corp. borrows $80,000 cash from Second National Bank. How does this transaction affect the accounting equation for Billington?

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Marsha Bogswell is the owner of Bogswell Legal Services. Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

Describe the three types of activities reported on the statement of cash flows.

The basic financial statements include all of the following except:

The assets of a company total $700,000; the liabilities, $200,000. What are the net assets?

What distinguishes liabilities from equity?

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?

Risk is:

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

A limited partnership:

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

An owner's investment increases equity via net income.

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

If equity is $300,000 and liabilities are $192,000, then assets equal:

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