Question 1

Liabilities are economic obligations of the organization to outsiders,or claims against its assets by outsiders.

Accepted Answer

A) True 
 B)False

Question 2

The accountant at Forgum Corporation is asked to prepare the financial statements for the month of July.Which financial statement will he NOT prepare?

Accepted Answer

A) Balance sheet 
B) Income statement 
C) Statement of earnings and taxation 
D) Statement of cash flows 
E) Statement of stockholders' equity 
A) Balance sheet 
B) Income statement 
C) Statement of earnings and taxation 
D) Statement of cash flows 
E) Statement of stockholders' equity

Question 3

An auditor's opinion is not

Accepted Answer

A) a report describing the auditor's examination of transactions and financial statements. 
B) included in the financial statements in the annual report issued by the corporation. 
C) another name for independent opinion. 
D) certified by the Securities Exchange Commission. 
E) a third party review. 
A) a report describing the auditor's examination of transactions and financial statements. 
B) included in the financial statements in the annual report issued by the corporation. 
C) another name for independent opinion. 
D) certified by the Securities Exchange Commission. 
E) a third party review.

Question 4

Privately held corporations can be owned by family members,but they still sell stock publicly.

Accepted Answer

A) True 
 B)False

Question 5

Following is an alphabetical list of the assets,liabilities,and stock owners' equity accounts of Apex Marketing Solutions.Prepare a balance sheet dated December 31,20X9.

$\begin{array}{l}
\begin{array} { l } 
\text { Accounts payable } \
\text { Account receivable } \
\text { Capital stock } \
\text { Cash } \
\text { Inventory } \
\text { Notes payable } \
\text { laid-in cepital in excess of par }
\end{array}
\begin{array} { l } 
\$ 2,000 \
31,400 \
25,500 \
18,000 \
9,600 \
14,900 \
16,600
\end{array}
\end{array}$

Accepted Answer

None

Question 6

Public accounting is

Accepted Answer

A) the field of accounting where accountants work for businesses,government agencies,or other nonprofit organizations. 
B) the field of accounting where services are offered to the general public on a fee basis. 
C) a field of accounting where no audits occur. 
D) the field that provides management with internal company reports. 
E) unregulated. 
A) the field of accounting where accountants work for businesses,government agencies,or other nonprofit organizations. 
B) the field of accounting where services are offered to the general public on a fee basis. 
C) a field of accounting where no audits occur. 
D) the field that provides management with internal company reports. 
E) unregulated.

Question 7

The balance sheet equation is assets = liabilities - owner's equity.

Accepted Answer

A) True 
 B)False

Question 8

Pandey Company's capital stock is currently selling for $25 per share.Pandey Company has the following accounts included within the owners' equity section of the balance sheet: $\begin{array} { l l } 
\text { Capital stock, \$1.00 par value, } 10,000 \text { shares issued } & \$ 10,000\
\text { Additional paid-in capital }  & \$  60,000\

\end{array}$ Assuming that the only transaction affecting these accounts was the sale of the company's capital stock,Pandey Company originally sold its capital stock for

Accepted Answer

A) $ 1.00 per share. 
B) $ 7.00 per share. 
C) $6.00 per share. 
D) $10.00 per share. 
E) The selling price of the capital stock cannot be determined from the information given. 
A) $ 1.00 per share. 
B) $ 7.00 per share. 
C) $6.00 per share. 
D) $10.00 per share. 
E) The selling price of the capital stock cannot be determined from the information given.

Question 9

Managerial accounting serves external users while financial accounting serves internal users.

Accepted Answer

A) True 
 B)False

Question 10

The Sarbanes-Oxley Act was passed in 2002 to regulate the accounting profession.Although the act encompasses many aspects,what is one of the parts of the act?

Accepted Answer

A) Requires rotation every ten years of the lead audit or coordinating partner and the reviewing partner on an audit 
B) Established the Public Company Accounting Oversight Board 
C) Requires all accounting firms to register with the SEC 
D) Prohibits public accounting firms from auditing SEC regulated companies 
E) Excludes certain industries from conducting business with public accounting firms 
A) Requires rotation every ten years of the lead audit or coordinating partner and the reviewing partner on an audit 
B) Established the Public Company Accounting Oversight Board 
C) Requires all accounting firms to register with the SEC 
D) Prohibits public accounting firms from auditing SEC regulated companies 
E) Excludes certain industries from conducting business with public accounting firms

Question 11

An owner's investment into a business will increase assets and decrease liabilities.

Accepted Answer

A) True 
 B)False

Question 12

Examples of assets include cash,inventory,and capital stock.

Accepted Answer

A) True 
 B)False

Question 13

The Financial Accounting Standards Codification

Accepted Answer

A) classifies U.S.GAAP to make it easy to research financial reporting issues. 
B) classifies U.S.tax laws to make it easy to research U.S.tax laws. 
C) classifies International Financial Reporting Standards to make it easy to research reporting issues. 
D) classifies international tax laws to make it easy to research international tax laws. 
E) classifies financial statements by type of organization and structure. 
A) classifies U.S.GAAP to make it easy to research financial reporting issues. 
B) classifies U.S.tax laws to make it easy to research U.S.tax laws. 
C) classifies International Financial Reporting Standards to make it easy to research reporting issues. 
D) classifies international tax laws to make it easy to research international tax laws. 
E) classifies financial statements by type of organization and structure.

Question 14

Which of the following international public accounting firms is not considered one of the four largest?

Accepted Answer

A) Deloitte Touche Tohmatsu 
B) Ernst & Young 
C) KPMG 
D) PwC 
E) Grant Thornton 
A) Deloitte Touche Tohmatsu 
B) Ernst & Young 
C) KPMG 
D) PwC 
E) Grant Thornton

Question 15

Notes Payable are classified as

Accepted Answer

A) equity. 
B) assets. 
C) owner investments. 
D) liabilities. 
E) expenses. 
A) equity. 
B) assets. 
C) owner investments. 
D) liabilities. 
E) expenses.

Question 16

Payton Corporation,acquired some office equipment,including a desk costing $900.The owner of the business next door said that he had been searching for a desk just like that one,so Payton Corporation,sold the desk to its business neighbor at cost,receiving $400 in cash,with the remainder to be paid in 30 days.The effect of this transaction on Payton Corporation,would be to

Accepted Answer

A) increase the cash account by $400,increase the capital account by $500,and decrease the equipment account by $900. 
B) increase the cash account by $400,increase the accounts payable account by $500,and decrease the equipment account by $900. 
C) increase the cash account by $400,decrease the accounts payable account by $500,and decrease the equipment account by $900. 
D) increase the cash account by $400,increase the accounts receivable account by $500,and decrease the equipment account by $900. 
E) increase the cash account by $400,decrease the accounts receivable account by $500,and decrease the equipment account by $900. 
A) increase the cash account by $400,increase the capital account by $500,and decrease the equipment account by $900. 
B) increase the cash account by $400,increase the accounts payable account by $500,and decrease the equipment account by $900. 
C) increase the cash account by $400,decrease the accounts payable account by $500,and decrease the equipment account by $900. 
D) increase the cash account by $400,increase the accounts receivable account by $500,and decrease the equipment account by $900. 
E) increase the cash account by $400,decrease the accounts receivable account by $500,and decrease the equipment account by $900.

Question 17

Which is a disadvantage of a corporation?

Accepted Answer

A) Limited liability for owners 
B) Easy transfer of ownership 
C) Ease in raising ownership capital from potential stockholders 
D) Management's consumption of perquisites 
E) Continuity of existence 
A) Limited liability for owners 
B) Easy transfer of ownership 
C) Ease in raising ownership capital from potential stockholders 
D) Management's consumption of perquisites 
E) Continuity of existence

Question 18

Which of the following individuals are most interested in management accounting information for Dotty Industries?

Accepted Answer

A) Bankers who loan money to Dotty Industries 
B) The IRS,who Dotty Industries pays taxes to 
C) Stockholders who buy stock in Dotty Industries 
D) Management who work for Dotty Industries 
E) Suppliers who sell goods to Dotty Industries 
A) Bankers who loan money to Dotty Industries 
B) The IRS,who Dotty Industries pays taxes to 
C) Stockholders who buy stock in Dotty Industries 
D) Management who work for Dotty Industries 
E) Suppliers who sell goods to Dotty Industries

Question 19

Which of the following would be classified as external users of financial statements?

Accepted Answer

A) Creditors of the organization and the Internal Revenue Service 
B) Stockholders and the CFO of the organization 
C) Management of the organization and the audit firm 
D) Management of the organization and SEC 
E) Stockholders and middle managers of the organization 
A) Creditors of the organization and the Internal Revenue Service 
B) Stockholders and the CFO of the organization 
C) Management of the organization and the audit firm 
D) Management of the organization and SEC 
E) Stockholders and middle managers of the organization

Question 20

The U.S.Congress has charged the SEC with ultimate responsibility for specifying GAAP for publicly traded companies.

Accepted Answer

A) True 
 B)False

Liabilities are economic obligations of the organization to outsiders,or claims against its assets by outsiders.

The accountant at Forgum Corporation is asked to prepare the financial statements for the month of July.Which financial statement will he NOT prepare?

An auditor's opinion is not

Privately held corporations can be owned by family members,but they still sell stock publicly.

Public accounting is

The balance sheet equation is assets = liabilities - owner's equity.

Managerial accounting serves external users while financial accounting serves internal users.

The Sarbanes-Oxley Act was passed in 2002 to regulate the accounting profession.Although the act encompasses many aspects,what is one of the parts of the act?

An owner's investment into a business will increase assets and decrease liabilities.

Examples of assets include cash,inventory,and capital stock.

The Financial Accounting Standards Codification

Which of the following international public accounting firms is not considered one of the four largest?

Notes Payable are classified as

Which is a disadvantage of a corporation?

Which of the following individuals are most interested in management accounting information for Dotty Industries?

Which of the following would be classified as external users of financial statements?

The U.S.Congress has charged the SEC with ultimate responsibility for specifying GAAP for publicly traded companies.

Measuring Income to Assess Performance

Recording Transactions

Accrual Accounting and Financial Statements

Statement of Cash Flows

Accounting for Sales

Inventories and Cost of Goods Sold

Long-Lived Assets

Liabilities and Interest

Stockholders Equity

Intercorporate Investments and Consolidations

Financial Statement Analysis

Filters

Exam 1: Accounting: the Language of Business

Liabilities are economic obligations of the organization to outsiders,or claims against its assets by outsiders.

The accountant at Forgum Corporation is asked to prepare the financial statements for the month of July.Which financial statement will he NOT prepare?

An auditor's opinion is not

Privately held corporations can be owned by family members,but they still sell stock publicly.

Public accounting is

The balance sheet equation is assets = liabilities - owner's equity.

Managerial accounting serves external users while financial accounting serves internal users.

The Sarbanes-Oxley Act was passed in 2002 to regulate the accounting profession.Although the act encompasses many aspects,what is one of the parts of the act?

An owner's investment into a business will increase assets and decrease liabilities.

Examples of assets include cash,inventory,and capital stock.

The Financial Accounting Standards Codification

Which of the following international public accounting firms is not considered one of the four largest?

Notes Payable are classified as

Which is a disadvantage of a corporation?

Which of the following individuals are most interested in management accounting information for Dotty Industries?

Which of the following would be classified as external users of financial statements?

The U.S.Congress has charged the SEC with ultimate responsibility for specifying GAAP for publicly traded companies.

Measuring Income to Assess Performance

Recording Transactions

Accrual Accounting and Financial Statements

Statement of Cash Flows

Accounting for Sales

Inventories and Cost of Goods Sold

Long-Lived Assets

Liabilities and Interest

Stockholders Equity

Intercorporate Investments and Consolidations

Financial Statement Analysis

Filters