Question 1

A is an economic event that under generally accepted accounting principles affects an element of the financial statements and must be recorded.

Accepted Answer

A) framework 
B) control 
C) set of rules 
D) transaction 
A) framework 
B) control 
C) set of rules 
D) transaction D

Question 2

Fees earned and received in cash will increase cash flows from operating activity as well as retained earnings.

Accepted Answer

A) True 
 B)False  True

Question 3

Johnson,Inc.issued $15,000 in capital stock in exchange for cash.What is the effect of this transaction?

Accepted Answer

A) Total assets remain unchanged. 
B) Cash flow from Financing Activities will increase. 
C) Net Income will increase. 
D) Total Retained Earnings will increase. 
A) Total assets remain unchanged. 
B) Cash flow from Financing Activities will increase. 
C) Net Income will increase. 
D) Total Retained Earnings will increase. B

Question 4

The basic financial statements include the:

Accepted Answer

A) trial balance. 
B) bank reconciliation statement. 
C) balance sheet. 
D) ledger account. 
A) trial balance. 
B) bank reconciliation statement. 
C) balance sheet. 
D) ledger account.

Question 5

The two sides of the accounting equation do not have to be equal.

Accepted Answer

A) True 
 B)False

Question 6

BNC Company earns revenues and as a result collects cash.Which of the following financial statement elements increased?

Accepted Answer

A) Cash only 
B) Stockholders' equity only 
C) Liabilities 
D) Cash and stockholders' equity 
A) Cash only 
B) Stockholders' equity only 
C) Liabilities 
D) Cash and stockholders' equity

Question 7

The gross increases in stockholders' equity attributable to business activities are called:

Accepted Answer

A) assets. 
B) liabilities. 
C) revenues. 
D) net income. 
A) assets. 
B) liabilities. 
C) revenues. 
D) net income.

Question 8

Exhibit 2-1
Total Assets Total Liabilities
Beginning of the year $300,000 $130,000
End of the year $800,000 $550,000
-Refer to Exhibit 2-1.Determine the net income (or loss),assuming no stock was issued and dividends of $40,000 were paid?

Accepted Answer

A) $40,000 
B) $210,000 
C) $120,000 
D) $290,000 
A) $40,000 
B) $210,000 
C) $120,000 
D) $290,000

Question 9

The accounting equation is expressed as follows: Assets = Liabilities + Stockholders' Equity.

Accepted Answer

A) True 
 B)False

Question 10

A common-sized income statement is prepared by expressing income statement amounts as a percent of .

Accepted Answer

A) sales 
B) purchases 
C) total assets 
D) profit 
A) sales 
B) purchases 
C) total assets 
D) profit

Question 11

Which of the following accounts is a stockholders' equity account?

Accepted Answer

A) Cash 
B) Capital Stock 
C) Prepaid Insurance 
D) Accounts Payable 
A) Cash 
B) Capital Stock 
C) Prepaid Insurance 
D) Accounts Payable

Question 12

The payment of $20,000 for expenses was incorrectly recorded by Elite Co.as an increase in cash of $20,000 and a decrease in retained earnings of $20,000.What is the effect of this error on the accounting equation?

Accepted Answer

A) Total assets will exceed total liabilities and stockholders' equity by $20,000. 
B) Total assets will exceed total liabilities and stockholders' equity by $40,000. 
C) Total assets will be less than total liabilities and stockholders' equity by $40,000. 
D) The error will not affect the accounting equation. 
A) Total assets will exceed total liabilities and stockholders' equity by $20,000. 
B) Total assets will exceed total liabilities and stockholders' equity by $40,000. 
C) Total assets will be less than total liabilities and stockholders' equity by $40,000. 
D) The error will not affect the accounting equation.

Question 13

Retained earnings will be increased by the amount in the dividend account.

Accepted Answer

A) True 
 B)False

Question 14

Refer to Coke's balance sheet and answer the following questions:

Accepted Answer

(a) No,for both 2008 and 2007,Coke had 3

Question 15

Which of the following is considered to be a liability?

Accepted Answer

A) Prepaid expenses 
B) Investments 
C) Unearned revenues 
D) Accrued revenues 
A) Prepaid expenses 
B) Investments 
C) Unearned revenues 
D) Accrued revenues

Question 16

Which of the following group of accounts are all assets?

Accepted Answer

A) Cash,Accounts Payable,Buildings 
B) Accounts Receivable,Revenue,Cash 
C) Prepaid Expenses,Buildings,Patents 
D) Unearned Revenues,Prepaid Expenses,Cash 
A) Cash,Accounts Payable,Buildings 
B) Accounts Receivable,Revenue,Cash 
C) Prepaid Expenses,Buildings,Patents 
D) Unearned Revenues,Prepaid Expenses,Cash

Question 17

A business receives $10,000 cash for a sale of merchandise and records this receipt of cash as an increase in accounts receivable by mistake.The accounting equation is still in balance.

Accepted Answer

A) True 
 B)False

Question 18

Revenues decrease stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 19

Dividends are an example of an expense.

Accepted Answer

A) True 
 B)False

Question 20

Declaring and paying cash dividends affects which account/ accounts?

Accepted Answer

A) Cash only 
B) Capital stock only 
C) Cash and retained earnings 
D) Cash and capital stock 
A) Cash only 
B) Capital stock only 
C) Cash and retained earnings 
D) Cash and capital stock

A is an economic event that under generally accepted accounting principles affects an element of the financial statements and must be recorded.

Fees earned and received in cash will increase cash flows from operating activity as well as retained earnings.

Johnson,Inc.issued $15,000 in capital stock in exchange for cash.What is the effect of this transaction?

The basic financial statements include the:

The two sides of the accounting equation do not have to be equal.

BNC Company earns revenues and as a result collects cash.Which of the following financial statement elements increased?

The gross increases in stockholders' equity attributable to business activities are called:

Exhibit 2-1 Total Assets Total Liabilities Beginning of the year $300,000 $130,000 End of the year $800,000 $550,000 -Refer to Exhibit 2-1.Determine the net income (or loss),assuming no stock was issued and dividends of $40,000 were paid?

The accounting equation is expressed as follows: Assets = Liabilities + Stockholders' Equity.

A common-sized income statement is prepared by expressing income statement amounts as a percent of .

Which of the following accounts is a stockholders' equity account?

The payment of $20,000 for expenses was incorrectly recorded by Elite Co.as an increase in cash of $20,000 and a decrease in retained earnings of $20,000.What is the effect of this error on the accounting equation?

Retained earnings will be increased by the amount in the dividend account.

Refer to Coke's balance sheet and answer the following questions:

Which of the following is considered to be a liability?

Which of the following group of accounts are all assets?

A business receives $10,000 cash for a sale of merchandise and records this receipt of cash as an increase in accounts receivable by mistake.The accounting equation is still in balance.

Revenues decrease stockholders' equity.

Dividends are an example of an expense.

Declaring and paying cash dividends affects which account/ accounts?

The Role of Accounting in Business

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 2: Basic Accounting Concepts

A is an economic event that under generally accepted accounting principles affects an element of the financial statements and must be recorded.

Fees earned and received in cash will increase cash flows from operating activity as well as retained earnings.

Johnson,Inc.issued $15,000 in capital stock in exchange for cash.What is the effect of this transaction?

The basic financial statements include the:

The two sides of the accounting equation do not have to be equal.

BNC Company earns revenues and as a result collects cash.Which of the following financial statement elements increased?

The gross increases in stockholders' equity attributable to business activities are called:

Exhibit 2-1 Total Assets Total Liabilities Beginning of the year $300,000 $130,000 End of the year $800,000 $550,000 -Refer to Exhibit 2-1.Determine the net income (or loss),assuming no stock was issued and dividends of $40,000 were paid?

The accounting equation is expressed as follows: Assets = Liabilities + Stockholders' Equity.

A common-sized income statement is prepared by expressing income statement amounts as a percent of .

Which of the following accounts is a stockholders' equity account?

The payment of $20,000 for expenses was incorrectly recorded by Elite Co.as an increase in cash of $20,000 and a decrease in retained earnings of $20,000.What is the effect of this error on the accounting equation?

Retained earnings will be increased by the amount in the dividend account.

Refer to Coke's balance sheet and answer the following questions:

Which of the following is considered to be a liability?

Which of the following group of accounts are all assets?

A business receives $10,000 cash for a sale of merchandise and records this receipt of cash as an increase in accounts receivable by mistake.The accounting equation is still in balance.

Revenues decrease stockholders' equity.

Dividends are an example of an expense.

Declaring and paying cash dividends affects which account/ accounts?

The Role of Accounting in Business

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters