Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

An accounting information system communicates data to help businesses make better decisions.

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

The area of accounting aimed at serving the decision making needs of internal users is:

Accepted Answer

A) Financial accounting. 
B) Managerial accounting. 
C) External auditing. 
D) SEC reporting. 
E) Bookkeeping. 
A) Financial accounting. 
B) Managerial accounting. 
C) External auditing. 
D) SEC reporting. 
E) Bookkeeping.

Question 5

The income statement displays revenues earned and expenses incurred over a specified period of time due to earnings activities.

Accepted Answer

A) True 
 B)False

Question 6

An example of an investing activity is:

Accepted Answer

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

Question 7

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

Accepted Answer

A) $61,000 increase. 
B) $37,000 increase. 
C) $7,000 decrease. 
D) $7,000 increase. 
E) $34,000 decrease. 
A) $61,000 increase. 
B) $37,000 increase. 
C) $7,000 decrease. 
D) $7,000 increase. 
E) $34,000 decrease.

Question 8

The owner's claim on assets is called __________________.

Accepted Answer

The answer of The owner's claim on assets is called...

Question 9

Identify and describe the four basic financial statements:

Accepted Answer

The four basic financial statements are

Question 10

The primary objective of financial accounting is:

Accepted Answer

A) To serve the decision-making needs of internal users. 
B) To provide financial statements to help external users analyze an organization's activities. 
C) To monitor and control company activities. 
D) To provide information on both the costs and benefits of looking after products and services. 
E) To know what, when, and how much to produce. 
A) To serve the decision-making needs of internal users. 
B) To provide financial statements to help external users analyze an organization's activities. 
C) To monitor and control company activities. 
D) To provide information on both the costs and benefits of looking after products and services. 
E) To know what, when, and how much to produce.

Question 11

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Accepted Answer

The answer of Congress passed the ______________________ to help curb...

Question 12

A company acquires equipment for $75,000 cash.This represents a(n):

Accepted Answer

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

Question 13

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 14

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

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

Question 16

On December 15 of the current year,Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in the following year.Which accounting principle would require Myers Legal Services to record the legal fees revenue in the following year and not the year the cash was received?

Accepted Answer

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

Question 17

Hal Burton began a Web Consulting practice and completed these transactions during September of the current year:
   Show the effects of the above transactions on the accounting equation of Halley Burton,Consultant.Use the following format for your answers.The first item is shown as an example.
Increase = I Decrease = D No effect = N

Accepted Answer

The answer of Hal Burton began a Web Consulting practice...

Question 18

Using the accounting equation,equity is equal to ________________________.

Accepted Answer

assets min

Question 19

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

Accepted Answer

The FASB is the private group

Question 20

Identifying the proper ethical path is easy.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

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

An accounting information system communicates data to help businesses make better decisions.

Flash 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:

The area of accounting aimed at serving the decision making needs of internal users is:

The income statement displays revenues earned and expenses incurred over a specified period of time due to earnings activities.

An example of an investing activity is:

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

The owner's claim on assets is called __________________.

Identify and describe the four basic financial statements:

The primary objective of financial accounting is:

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

A company acquires equipment for $75,000 cash.This represents a(n):

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

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

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:

Using the accounting equation,equity is equal to ________________________.

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

Identifying the proper ethical path is easy.

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, 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

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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