Question 1

Business owners use accounting information to set goals, evaluate progress toward those goals, and make adjustments when needed.

Accepted Answer

A) True 
 B)False

Question 2

Match the accounting position to the job description.

-Certified Public Accountant

Accepted Answer

A) Performs reviews of companies to ensure compliance to rules and regulations 
B) Compiles financial statements, interacts with auditors, oversees regulatory reporting 
C) Specializes in accounting and financial management knowledge 
D) Serves the general public 
A) Performs reviews of companies to ensure compliance to rules and regulations 
B) Compiles financial statements, interacts with auditors, oversees regulatory reporting 
C) Specializes in accounting and financial management knowledge 
D) Serves the general public

Question 3

Provide the definition of each of the following accounting assumptions.
 $$\begin{array} { | l | l | } 
\hline \text { Assumption } & \text { Definition } \
\hline \text { Monetary Unit } & \
\hline \text { Economic Entity } & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | } 
\hline \t

Question 4

A corporation's chief executive officer appoints the members of the board of directors.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements, regarding International Financial Reporting Standards (IFRS), is correct?

Accepted Answer

A)  International Financial Reporting Standards are issued by the Financial Accounting Standards Board. 
B)  The Securities and Exchange Commission is the private organization that oversees the creation and governance of International Financial Reporting Standards. 
C)  International Financial Reporting Standards represent a set of global accounting standards that are generally more specific and based less on principle than U.S. Generally Accepted Accounting Principles. 
D)  Companies who are incorporated in or do significant business in another country might be required to publish financial statements using International Financial Reporting Standards. 
A)  International Financial Reporting Standards are issued by the Financial Accounting Standards Board. 
B)  The Securities and Exchange Commission is the private organization that oversees the creation and governance of International Financial Reporting Standards. 
C)  International Financial Reporting Standards represent a set of global accounting standards that are generally more specific and based less on principle than U.S. Generally Accepted Accounting Principles. 
D)  Companies who are incorporated in or do significant business in another country might be required to publish financial statements using International Financial Reporting Standards.

Question 6

The equity of Alliance Company is $170,000 and the total liabilities are $30,000. The total assets are ________.

Accepted Answer

A)  $340,000 
B)  $60,000 
C)  $140,000 
D)  $200,000 
A)  $340,000 
B)  $60,000 
C)  $140,000 
D)  $200,000

Question 7

Which of the following is true of retained earnings?

Accepted Answer

A)  Retained earnings decrease with payment of dividends. 
B)  Retained earnings increase with purchase of assets. 
C)  Retained earnings decrease with collection of revenue. 
D)  Retained earnings increase with payment on account. 
A)  Retained earnings decrease with payment of dividends. 
B)  Retained earnings increase with purchase of assets. 
C)  Retained earnings decrease with collection of revenue. 
D)  Retained earnings increase with payment on account.

Question 8

In the United States, transactions are recorded in dollars because the dollar's purchasing power does not change over time.

Accepted Answer

A) True 
 B)False

Question 9

For the accounting equation to balance, a transaction must affect both sides of the equation.

Accepted Answer

A) True 
 B)False

Question 10

List the four financial statements and describe the information provided by each.
 $$\begin{array} { | l | l | } 
\hline \text { Financial statement } & \text { Information provided } \
\hline \text { 1. } & \
\
\
\hline 2 . & \
\
\
\hline \text { 3. } & \
\
\
\hline 4 . & \
\
\
\hline
\end{array}$$

Accepted Answer

None

Question 11

Equity increases when revenues are earned.

Accepted Answer

A) True 
 B)False

Question 12

Economic resources and debts of the company are shown on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

For each of the following decisions, identify if it applies to a financial accounting (FA) or a managerial accounting (MA) decision maker. Your answer should be either FA or MA. Include only one choice for each accounting decision.
 $$\begin{array} { | l | l | } 
\hline \text { Accounting Decision } & \text { Decision Maker (FA or MA) } \
\hline\text { Should the business expand to a } & \
\text { new location? } & \
\hline \text { Is the business profitable? } & \
\hline \text { How do actual costs compare to } & \
\text { budgeted costs? } & \
\hline \text { Should I invest in the business? } & \
\hline
\end{array}$$

Accepted Answer

None

Question 14

Which of the following statements is true of an income statement?

Accepted Answer

A)  There is net income when total expenses are greater than total revenues. 
B)  There is a net loss when total expenses are less than total revenue. 
C)  There is a net loss when total expenses are greater than total liabilities. 
D)  There is net income when total revenues are greater than total expenses. 
A)  There is net income when total expenses are greater than total revenues. 
B)  There is a net loss when total expenses are less than total revenue. 
C)  There is a net loss when total expenses are greater than total liabilities. 
D)  There is net income when total revenues are greater than total expenses.

Question 15

The field of accounting that focuses on providing information for internal decision makers is ________.

Accepted Answer

A)  managerial accounting 
B)  financial accounting 
C)  nonmonetary accounting 
D)  governmental accounting 
A)  managerial accounting 
B)  financial accounting 
C)  nonmonetary accounting 
D)  governmental accounting

Question 16

The heading of a balance sheet will show the same information for the date line as the heading for a statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following will be categorized as an investing activity on the statement of cash flows?

Accepted Answer

A)  Purchase of land with a mortgage 
B)  Cash paid for purchase of new machinery 
C)  Cash paid for purchase of office supplies 
D)  Cash received from issuance of shares of common stock 
A)  Purchase of land with a mortgage 
B)  Cash paid for purchase of new machinery 
C)  Cash paid for purchase of office supplies 
D)  Cash received from issuance of shares of common stock

Question 18

Income tax is calculated using accounting information.

Accepted Answer

A) True 
 B)False

Question 19

Analyze each of the following transactions in terms of their effects on the accounting equation of Osgood Delivery Service. Enter the correct amounts in the columns of the spreadsheet.
a) James Osgood contributes $75,000 to the business. The business issues common stock to James.
b) The business purchases $750 of office supplies on account.
c) The business pays cash to purchase a delivery van for $25,000.
d) Services are performed for clients and $5,000 cash is received.
e) Cash is paid for office rent expense, $800 and utilities expense, $400.
f) Cash dividends of $1,000 are paid to stockholders.

Accepted Answer

The answer of Analyze each of the following transactions in...

Question 20

If a transaction does not involve cash, such as the purchase of supplies on account, it will not be reported on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting and the Business Environment

Business owners use accounting information to set goals, evaluate progress toward those goals, and make adjustments when needed.

Match the accounting position to the job description. -Certified Public Accountant

Provide the definition of each of the following accounting assumptions. Assumption Definition Monetary Unit Economic Entity

A corporation's chief executive officer appoints the members of the board of directors.

Which of the following statements, regarding International Financial Reporting Standards (IFRS), is correct?

The equity of Alliance Company is $170,000 and the total liabilities are $30,000. The total assets are ________.

Which of the following is true of retained earnings?

In the United States, transactions are recorded in dollars because the dollar's purchasing power does not change over time.

For the accounting equation to balance, a transaction must affect both sides of the equation.

List the four financial statements and describe the information provided by each. Financial statement Information provided 1. 2. 3. 4.

Equity increases when revenues are earned.

Economic resources and debts of the company are shown on the balance sheet.

Which of the following statements is true of an income statement?

The field of accounting that focuses on providing information for internal decision makers is ________.

The heading of a balance sheet will show the same information for the date line as the heading for a statement of retained earnings.

Which of the following will be categorized as an investing activity on the statement of cash flows?

Income tax is calculated using accounting information.

If a transaction does not involve cash, such as the purchase of supplies on account, it will not be reported on the statement of cash flows.

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based Just-In-Time

Cost Volume Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Understanding Accounting Information Systems and their Components

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