Question 1

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 2

Define liabilities.Provide three examples of liabilities.

Accepted Answer

Liabilities are debts that are owed to c

Question 3

The return on assets is calculated by ________.

Accepted Answer

A)  subtracting net income from average total assets 
B)  adding net income and average total assets 
C)  dividing net income by average total assets 
D)  multiplying net income and average total assets 
A)  subtracting net income from average total assets 
B)  adding net income and average total assets 
C)  dividing net income by average total assets 
D)  multiplying net income and average total assets

Question 4

Match the accounting position to the job description.
-Controller

Accepted Answer

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

Question 5

Which of the following financial statements reports expenses in decreasing order of their amounts,by stating the largest expense first?

Accepted Answer

A)  Statement of cash flows 
B)  Income statement 
C)  Statement of owner's equity 
D)  Balance sheet 
A)  Statement of cash flows 
B)  Income statement 
C)  Statement of owner's equity 
D)  Balance sheet

Question 6

The owner's capital account decreases with ________.

Accepted Answer

A)  net income 
B)  the purchase of long-term assets 
C)  the owner's contributions 
D)  the owner's withdrawals 
A)  net income 
B)  the purchase of long-term assets 
C)  the owner's contributions 
D)  the owner's withdrawals

Question 7

Assets are economic resources that have no future benefits for the business.

Accepted Answer

A) True 
 B)False

Question 8

Decision makers are looking for an international accounting language because the most significant change in the business world in the last decade has been the huge increase in international commerce.

Accepted Answer

A) True 
 B)False

Question 9

Using the following information,provide the complete accounting equation.
 $$\begin{array} { | l | l | } 
\hline \text { Use this information to } & \text { Provide the accounting equation } \
\hline \text { Equity } \$ 200,000 ; \text { Assets } \$ 360,000 & \
\hline \text { Liabilities } \$ 180,000 ; \text { Assets } & \
\$ 320,000 & \
\hline \text { Equity } \$ 725,000 \text { Liabilities } & \
\$ 350,000 & \
\hline
\end{array}$$

Accepted Answer

The answer of Using the following information,provide the complete accounting...

Question 10

Mason Company purchased land for $80,000.The president of Mason Company believes that the land is actually worth $85,000.The land can be recorded at $85,000.

Accepted Answer

A) True 
 B)False

Question 11

For each of the following events:
State whether the event increases (INC)or decreases (DEC)owner's capital.If the event does not affect owner's capital,state NE for no effect.
 $$\begin{array} { | l | l | } 
\hline \text { Event } & \text { INC, DEC, NE Owner's Capital } \
\hline \text { Withdrawal of cash by owner of sole } & \
\text { proprietorship for personal use } & \
\hline \text { Creditor loaned money to the } & \
\text { business }\
\hline\text { Costs of selling goods or services } \
\hline  
\end{array}$$

Accepted Answer

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

Question 12

An owner's withdrawal represents a distribution of earnings to the owner.

Accepted Answer

A) True 
 B)False

Question 13

A payable is always a liability.

Accepted Answer

A) True 
 B)False

Question 14

The Public Company Accounting Oversight Board is a watchdog agency that monitors the work of independent accountants who audit public companies.

Accepted Answer

A) True 
 B)False

Question 15

For each of the following events:
State whether the event increases (INC)or decreases (DEC)owner's capital.If the event does not affect owner's capital,state NE for no effect.
 $$\begin{array} { |l | l |} 
\hline\text { Event } &\text {INC, DEC, NE Owner's Capital } \
\hline \text { Owner contributions of cash to a sole } & \
\text { proprietorship } & \
\hline \text { Amounts earned from delivering } & \
\text { goods or services to customers } & \
\hline \begin{array} { l } 
\text { Cash paid to acquire land for use in } \
\text { the business } 
\end{array} & \
\hline
\end{array}$$

Accepted Answer

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

Question 16

Which of the following will be categorized as a financing activity on the statement of cash flows?

Accepted Answer

A)  Cash received by selling old equipment 
B)  Cash paid for purchase of new machinery 
C)  Cash paid for rent 
D)  Cash contribution by owner 
A)  Cash received by selling old equipment 
B)  Cash paid for purchase of new machinery 
C)  Cash paid for rent 
D)  Cash contribution by owner

Question 17

The balance sheet allows decision makers to determine their opinion about the financial position of the company.

Accepted Answer

A) True 
 B)False

Question 18

Rosewood Company purchased land for $140,000 by making a cash payment of $36,000 and promising to pay the remaining amount in a later accounting period.What is the net effect of this transaction on Rosewood's accounting equation?

Accepted Answer

A)  assets increase by $140,000 and liabilities decrease by $36,000 
B)  assets increase by $140,000 and liabilities decrease by $104,000 
C)  assets and equity increase by $104,000 
D)  assets and liabilities increase by $104,000 
A)  assets increase by $140,000 and liabilities decrease by $36,000 
B)  assets increase by $140,000 and liabilities decrease by $104,000 
C)  assets and equity increase by $104,000 
D)  assets and liabilities increase by $104,000

Question 19

Financial statements are business documents used to communicate information needed to make business decisions.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements is TRUE of a sole proprietorship?

Accepted Answer

A)  A sole proprietorship joins two or more individuals as co-owners. 
B)  The sole proprietor is personally liable for the liabilities of the business. 
C)  A sole proprietorship is taxed separately from the owner. 
D)  A sole proprietorship has to pay business income taxes. 
A)  A sole proprietorship joins two or more individuals as co-owners. 
B)  The sole proprietor is personally liable for the liabilities of the business. 
C)  A sole proprietorship is taxed separately from the owner. 
D)  A sole proprietorship has to pay business income taxes.

Exam 1: Accounting and the Business Environment

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

Define liabilities.Provide three examples of liabilities.

The return on assets is calculated by ________.

Match the accounting position to the job description. -Controller

Which of the following financial statements reports expenses in decreasing order of their amounts,by stating the largest expense first?

The owner's capital account decreases with ________.

Assets are economic resources that have no future benefits for the business.

Decision makers are looking for an international accounting language because the most significant change in the business world in the last decade has been the huge increase in international commerce.

Using the following information,provide the complete accounting equation. Use this information to Provide the accounting equation Equity \ 200,000; Assets \ 360,000 Liabilities \ 180,000; Assets \ 320,000 Equity \ 725,000 Liabilities \ 350,000

Mason Company purchased land for $80,000.The president of Mason Company believes that the land is actually worth $85,000.The land can be recorded at $85,000.

An owner's withdrawal represents a distribution of earnings to the owner.

A payable is always a liability.

The Public Company Accounting Oversight Board is a watchdog agency that monitors the work of independent accountants who audit public companies.

Which of the following will be categorized as a financing activity on the statement of cash flows?

The balance sheet allows decision makers to determine their opinion about the financial position of the company.

Rosewood Company purchased land for $140,000 by making a cash payment of $36,000 and promising to pay the remaining amount in a later accounting period.What is the net effect of this transaction on Rosewood's accounting equation?

Financial statements are business documents used to communicate information needed to make business decisions.

Which of the following statements is TRUE of a sole proprietorship?

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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