Question 1

General accounting principles stem from long-used accounting practices.

Accepted Answer

A) True 
 B)False

Question 2

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Accepted Answer

A) $97,000. 
B) $38,000. 
C) $88,000. 
D) $47,000. 
E) $25,000. 
A) $97,000. 
B) $38,000. 
C) $88,000. 
D) $47,000. 
E) $25,000.

Question 3

Match between columns
                        Premises: Revenues.
Assets.
Liabilities.
Expenses.
Cash from operating activities.
Withdrawals.
Cash from investing activities.
Cash from financing activities.

Accepted Answer

The Answer of Statement of cash flows and Statement of is...

Question 4

Net income occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 5

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

Accepted Answer

A) True 
 B)False

Question 6

Financial accounting is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

Accepted Answer

A) True 
 B)False

Question 7

The accounting equation can be restated as: Assets - Equity = Liabilities.

Accepted Answer

A) True 
 B)False

Question 8

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Accepted Answer

A) True 
 B)False

Question 9

You are reviewing the accounting records of Buddy's Foreign Automotive, owned by Bruce Jones. You have uncovered the following situations. List the appropriate accounting principle related to each independent scenario and suggest a correct action for each.
1. In August, a check for $500 was written to Community Sports. This amount represents soccer camp for his daughter Cassie.
2. Bruce plans a Going Out of Business Sale for June, since he will be closing the business for a month-long vacation in July. He plans to reopen August 1 and will continue operating Buddy's Foreign Automotive indefinitely.
3. Buddy received a shipment of tools from Ontario, Canada. The invoice was stated in Canadian dollars.
4. Sandy Lane paid $1,500 for a major repair services. The amount was recorded as revenue. The parts for the repair must be ordered from overseas and the service won't be complete until the following month.

Accepted Answer

1. Business entity assumption. Buddy sho

Question 10

The Sarbanes-Oxley Act (SOX)does not require public companies to apply both accounting oversight and stringent internal controls.

Accepted Answer

A) True 
 B)False

Question 11

The International Accounting Standards Board (IASB):

Accepted Answer

A) Only applies to companies that are members of the European Union. 
B) Is the only source of generally accepted accounting principles (GAAP). 
C) Has the authority to impose its standards on companies around the world. 
D) Hopes to create harmony among accounting practices of different countries to improve comparability. 
E) Is the government group that establishes reporting requirements for companies that issue stock to the investing public. 
A) Only applies to companies that are members of the European Union. 
B) Is the only source of generally accepted accounting principles (GAAP). 
C) Has the authority to impose its standards on companies around the world. 
D) Hopes to create harmony among accounting practices of different countries to improve comparability. 
E) Is the government group that establishes reporting requirements for companies that issue stock to the investing public.

Question 12

A balance sheet covers activities over a period of time such as a month or year.

Accepted Answer

A) True 
 B)False

Question 13

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Accepted Answer

A) Total revenues of $70,000 and total expenses of $60,000. 
B) Total revenues of $40,000 and total expenses of $20,000. 
C) Total revenues of $80,000 and total expenses of $60,000. 
D) Total revenues of $60,000 and total expenses of $40,000. 
E) Total revenues of $170,000 and total expenses of $150,000. 
A) Total revenues of $70,000 and total expenses of $60,000. 
B) Total revenues of $40,000 and total expenses of $20,000. 
C) Total revenues of $80,000 and total expenses of $60,000. 
D) Total revenues of $60,000 and total expenses of $40,000. 
E) Total revenues of $170,000 and total expenses of $150,000.

Question 15

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:

Accepted Answer

A) Going-concern assumption. 
B) Measurement (Cost)principle. 
C) Business entity assumption. 
D) Accounting equation. 
E) Realization principle. 
A) Going-concern assumption. 
B) Measurement (Cost)principle. 
C) Business entity assumption. 
D) Accounting equation. 
E) Realization principle.

Question 16

The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

Accepted Answer

A) Time-period assumption. 
B) Revenue recognition principle. 
C) Measurement (Cost)principle. 
D) Business entity assumption. 
E) Going-concern assumption. 
A) Time-period assumption. 
B) Revenue recognition principle. 
C) Measurement (Cost)principle. 
D) Business entity assumption. 
E) Going-concern assumption.

Question 17

Flitter reported net income of $17,500 for the past year. At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities. By the end of the year, assets had increased to $300,000 and liabilities were $75,000. Calculate its return on assets:

Accepted Answer

A) 23.3%. 
B) 35.0%. 
C) 8.8%. 
D) 7.0%. 
E) 5.8%. 
A) 23.3%. 
B) 35.0%. 
C) 8.8%. 
D) 7.0%. 
E) 5.8%.

Question 18

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

Accepted Answer

The Financial Accounting Standards Board

Question 19

The monetary unit assumption means that all companies doing business in the United States must express transactions and events in U.S. dollars.

Accepted Answer

A) True 
 B)False

Question 20

Creditors' claims on the assets of a company are called:

Accepted Answer

A) Net losses. 
B) Liabilities. 
C) Expenses. 
D) Revenues. 
E) Equity. 
A) Net losses. 
B) Liabilities. 
C) Expenses. 
D) Revenues. 
E) Equity.

General accounting principles stem from long-used accounting practices.

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Net income occurs when revenues exceed expenses.

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

Financial accounting is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

The accounting equation can be restated as: Assets - Equity = Liabilities.

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

The Sarbanes-Oxley Act (SOX)does not require public companies to apply both accounting oversight and stringent internal controls.

The International Accounting Standards Board (IASB):

A balance sheet covers activities over a period of time such as a month or year.

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:

The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

Flitter reported net income of $17,500 for the past year. At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities. By the end of the year, assets had increased to $300,000 and liabilities were $75,000. Calculate its return on assets:

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

The monetary unit assumption means that all companies doing business in the United States must express transactions and events in U.S. dollars.

Creditors' claims on the assets of a company are called:

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

General accounting principles stem from long-used accounting practices.

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Net income occurs when revenues exceed expenses.

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

Financial accounting is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

The accounting equation can be restated as: Assets - Equity = Liabilities.

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

The Sarbanes-Oxley Act (SOX)does not require public companies to apply both accounting oversight and stringent internal controls.

The International Accounting Standards Board (IASB):

A balance sheet covers activities over a period of time such as a month or year.

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:

The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

Flitter reported net income of $17,500 for the past year. At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities. By the end of the year, assets had increased to $300,000 and liabilities were $75,000. Calculate its return on assets:

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

The monetary unit assumption means that all companies doing business in the United States must express transactions and events in U.S. dollars.

Creditors' claims on the assets of a company are called:

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