Question 1

Public accountants follow the code of ethics for professional conduct established by the

Accepted Answer

A) Sarbanes-Oxley Act. 
B) Securities and Exchange Commission. 
C) Financial Accounting Standards Board. 
D) Congress of the United States. 
E) American Institute of Certified Public Accountants. 
A) Sarbanes-Oxley Act. 
B) Securities and Exchange Commission. 
C) Financial Accounting Standards Board. 
D) Congress of the United States. 
E) American Institute of Certified Public Accountants.

Question 2

The purchase of inventory on credit will increase liabilities and equity.

Accepted Answer

A) True 
 B)False

Question 3

What is the purpose of a balance sheet?

Accepted Answer

A balance sheet shows the financial posi

Question 4

Accountants analyze and record

Accepted Answer

A) economic events. 
B) costs. 
C) revenues. 
D) financial statements. 
E) creditor statements. 
A) economic events. 
B) costs. 
C) revenues. 
D) financial statements. 
E) creditor statements.

Question 5

When stock is sold,the difference between the total amount the company receives and the par value is called

Accepted Answer

A) stated value. 
B) par value. 
C) additional paid-in capital. 
D) stockholders' equity value. 
E) common stock. 
A) stated value. 
B) par value. 
C) additional paid-in capital. 
D) stockholders' equity value. 
E) common stock.

Question 6

Describe the three forms of business entities and state how they differ.

Accepted Answer

A proprietorship has a single owner wher

Question 7

How do generally accepted accounting principles present an ethical issue in financial accounting?

Accepted Answer

Because financial accounting provides in

Question 8

Describe the differences between financial accounting and management accounting.

Accepted Answer

Financial accounting focuses on the spec

Question 9

Assets and owners' equity are presented on the right side of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 10

The principal task of the FASB is to

Accepted Answer

A) be a link between the business community and the Securities and Exchange Commission (SE
C) . 
B) establish GAAP in the United States. 
C) audit each public company's financial statements and records. 
D) act as a counsel and advocate for business in its dealings with the government,particularly,but not solely,to the SEC. 
E) review financial statements,so as to ensure adherence to GAAP. 
A) be a link between the business community and the Securities and Exchange Commission (SE
C) . 
B) establish GAAP in the United States. 
C) audit each public company's financial statements and records. 
D) act as a counsel and advocate for business in its dealings with the government,particularly,but not solely,to the SEC. 
E) review financial statements,so as to ensure adherence to GAAP.

Question 11

Because officials in federal,state,and local governments are not in the business of making a profit,they do not need an understanding of accounting.

Accepted Answer

A) True 
 B)False

Question 12

The American Institute of Certified Public Accountants prepares and grades a CPA exam on a national basis.

Accepted Answer

A) True 
 B)False

Question 13

Shelly Wagner began a sole proprietorship named Wagner Company on June 1,20X9.Following are the transactions,which occurred during the first 10 days of June,20X9.
 June 1 Shelly invested $ \$ 6,600 $ cash in Wagner Company
June 2 Wagner Company acquired equipment costing $ \$ 3,900 $. One-third of the balance was paid in cash with the balance as a note.
June 4 Wagner Company acquired inventory costing $ \$ 2,200 $, half of which was paid in cash.
June 5 Wagner Company acquired $ \$ 200 $ in supplies on open account.
June 7 Shelly's daughter, Sydney, purchased $ \$ 600 $ of equipment, at cost and on open account from
Wagner Company
Iune $ 9 \quad $ Wagner Company returned $ \$ 100 $ of defective inventory and received a full credit.
June 10 Wagner Company received $ \$ 200 $ from Sydney, Shelly's daughter, in partial settlement of her Required:
1.Prepare an analysis of the transactions on the balance sheet equation.
2.Prepare a balance sheet for Wagner Company as of June 10,20X9.

Accepted Answer

None

Question 14

The governmental agency that regulates the stock market and the financial reporting of firms that trade in the market is the

Accepted Answer

A) Financial Accounting Standards Board. 
B) Internal Revenue Service. 
C) Public Company Accounting Oversight Board. 
D) Securities and Exchange Commission. 
E) Generally Accepted Accounting Board. 
A) Financial Accounting Standards Board. 
B) Internal Revenue Service. 
C) Public Company Accounting Oversight Board. 
D) Securities and Exchange Commission. 
E) Generally Accepted Accounting Board.

Question 15

A balance sheet is dated for a period of time,such as "for the year ended December 31,20X2."

Accepted Answer

A) True 
 B)False

Question 16

Halo Corporation repaid an $8,000 note payable by issuing 500 shares of its $4.00 par value capital stock.The effect of this transaction on Halo Corporation would be to

Accepted Answer

A) increase the capital stock at par by $8,000 and decrease the notes payable account by $8,000. 
B) increase the capital stock at par by $2,000 and decrease the notes payable account by $2,000. 
C) increase the capital stock at par by $2,000,increase the paid-in capital in excess of par account by $6,000,and decrease the notes payable account by $8,000. 
D) increase the capital stock at par by $2,000,decrease the paid-in capital in excess of par account by $6,000,and decrease the notes payable account by $8,000. 
E) increase the capital stock at par by $2,000,decrease the cash account by $6,000,and decrease the notes payable account by $8,000. 
A) increase the capital stock at par by $8,000 and decrease the notes payable account by $8,000. 
B) increase the capital stock at par by $2,000 and decrease the notes payable account by $2,000. 
C) increase the capital stock at par by $2,000,increase the paid-in capital in excess of par account by $6,000,and decrease the notes payable account by $8,000. 
D) increase the capital stock at par by $2,000,decrease the paid-in capital in excess of par account by $6,000,and decrease the notes payable account by $8,000. 
E) increase the capital stock at par by $2,000,decrease the cash account by $6,000,and decrease the notes payable account by $8,000.

Question 17

The primary purpose of financial accounting is to

Accepted Answer

A) supply information for external users' decision making. 
B) provide data for internal users' decision making. 
C) produce data for income taxes. 
D) create an audit report. 
E) organize the data for management. 
A) supply information for external users' decision making. 
B) provide data for internal users' decision making. 
C) produce data for income taxes. 
D) create an audit report. 
E) organize the data for management.

Question 18

Home Theater Advantage sells audio equipment.Home Theater Advantage acquired 50 speakers from a manufacturer at a cost of $200 per speaker and purchased the speakers on account.The effect of this transaction on Home Theater Advantage would be to

Accepted Answer

A) increase inventory by $10,000 and increase capital by $10,000. 
B) increase inventory by $10,000 and decrease capital by $10,000. 
C) increase inventory by $10,000 and decrease cash by $10,000. 
D) increase inventory by $10,000 and increase accounts payable by $10,000. 
E) increase inventory by $10,000 and decrease accounts payable by $10,000. 
A) increase inventory by $10,000 and increase capital by $10,000. 
B) increase inventory by $10,000 and decrease capital by $10,000. 
C) increase inventory by $10,000 and decrease cash by $10,000. 
D) increase inventory by $10,000 and increase accounts payable by $10,000. 
E) increase inventory by $10,000 and decrease accounts payable by $10,000.

Question 19

The auditor's opinion is also called an independent opinion.

Accepted Answer

A) True 
 B)False

Question 20

A liability that results from a purchase of goods or services on open account is referred to as a(n)

Accepted Answer

A) accounts receivable. 
B) notes payable. 
C) accounts payable. 
D) notes receivable. 
E) capital stock. 
A) accounts receivable. 
B) notes payable. 
C) accounts payable. 
D) notes receivable. 
E) capital stock.

Public accountants follow the code of ethics for professional conduct established by the

The purchase of inventory on credit will increase liabilities and equity.

What is the purpose of a balance sheet?

Accountants analyze and record

When stock is sold,the difference between the total amount the company receives and the par value is called

Describe the three forms of business entities and state how they differ.

How do generally accepted accounting principles present an ethical issue in financial accounting?

Describe the differences between financial accounting and management accounting.

Assets and owners' equity are presented on the right side of the balance sheet.

The principal task of the FASB is to

Because officials in federal,state,and local governments are not in the business of making a profit,they do not need an understanding of accounting.

The American Institute of Certified Public Accountants prepares and grades a CPA exam on a national basis.

The governmental agency that regulates the stock market and the financial reporting of firms that trade in the market is the

A balance sheet is dated for a period of time,such as "for the year ended December 31,20X2."

Halo Corporation repaid an $8,000 note payable by issuing 500 shares of its $4.00 par value capital stock.The effect of this transaction on Halo Corporation would be to

The primary purpose of financial accounting is to

Home Theater Advantage sells audio equipment.Home Theater Advantage acquired 50 speakers from a manufacturer at a cost of $200 per speaker and purchased the speakers on account.The effect of this transaction on Home Theater Advantage would be to

The auditor's opinion is also called an independent opinion.

A liability that results from a purchase of goods or services on open account is referred to as a(n)

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

Public accountants follow the code of ethics for professional conduct established by the

The purchase of inventory on credit will increase liabilities and equity.

What is the purpose of a balance sheet?

Accountants analyze and record

When stock is sold,the difference between the total amount the company receives and the par value is called

Describe the three forms of business entities and state how they differ.

How do generally accepted accounting principles present an ethical issue in financial accounting?

Describe the differences between financial accounting and management accounting.

Assets and owners' equity are presented on the right side of the balance sheet.

The principal task of the FASB is to

Because officials in federal,state,and local governments are not in the business of making a profit,they do not need an understanding of accounting.

The American Institute of Certified Public Accountants prepares and grades a CPA exam on a national basis.

The governmental agency that regulates the stock market and the financial reporting of firms that trade in the market is the

A balance sheet is dated for a period of time,such as "for the year ended December 31,20X2."

Halo Corporation repaid an $8,000 note payable by issuing 500 shares of its $4.00 par value capital stock.The effect of this transaction on Halo Corporation would be to

The primary purpose of financial accounting is to

Home Theater Advantage sells audio equipment.Home Theater Advantage acquired 50 speakers from a manufacturer at a cost of $200 per speaker and purchased the speakers on account.The effect of this transaction on Home Theater Advantage would be to

The auditor's opinion is also called an independent opinion.

A liability that results from a purchase of goods or services on open account is referred to as a(n)

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