Exam 1: Accounting and the Business Environment

An American business records transactions using the U.S.dollar and disregards fluctuation in the buying power of the dollar over time.This represents the:

ABC Delivery Service had the following transactions in June: Earned $4,000 cash for services rendered; collected $2,500 from a customer "on account;" paid out $200 cash for plumbing services; received $3,500 of supplies and promised to pay one month later; paid out $1,000 in cash drawings to the owner. -What is the combined effect on Cash of the June transactions?

Which of the following amounts appears on both the statement of owner's equity and the balance sheet?

There are relatively few types of revenue.Which of the following in NOT a type of revenue?

Counting the actual physical inventory of a company and comparing it to accounting records would be an example of the:

Accounting is the information system that measures business activity,processes the data into reports,and communicates the results to decision makers.

On the financial statements,which line item connects the balance sheet to the statement of cash flows?

A promise received from a business's customers to pay for goods and services that they received from the business is called a(n):

Ace Builders had the following transactions in June: Earned $4,000 "on account;" collected $3,000 from a customer that was owed from a previous month; incurred $500 of repair expense and paid cash to the repairman; paid $1,200 to a supplier that it owed from the previous month; paid out $800 in cash drawings to the owner. -What is the combined effect on Owner's capital of the June transactions?

Which of the following is TRUE for a proprietorship?

Martin Supply Service received $1,000 cash from a customer which was owed to the business from the previous month.What is the effect of the cash receipt on the accounts of the business?

A proprietor makes a cash withdrawal from the proprietorship.How does this affect the accounting equation?

Bill purchased office supplies for $500 cash.What is the effect on accounts?

Many liabilities have the word "receivable" in their titles.

Which of the following amounts appears on both the income statement and statement of owner's equity?

The income statement shows whether or not a business can generate enough cash to pay its liabilities.

Independent accountants that audit public companies come under the regulatory supervision of the PCAOB.

In an LLC,who is responsible for the company's debts?

Outside investors would ordinarily use financial accounting information to decide whether or not to invest in a business.

If an analyst wants to know how likely it is that a company would be able to earn a profit,which of the following statements would be MOST useful?