Exam 1: Introduction to Accounting and Business

Expenses are recorded when

Which of the following would not normally operate as a service business?

The unit of measurement concept requires that economic data be recorded in a common unit of measurement.

List the five steps in the process by which accounting provides information to users.

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)

The total assets and the total liabilities of a business at the beginning and at the end of the year appear below. During the year, the company paid $55,000 in cash dividends and issued an additional $33,000 of capital stock. Calculate the net income for the year.

The year-end balance of the retained earnings account appears in

.Which of the following is true in regard to a Limited Liability Company?

Indicate whether each of the following represents an asset, liability, or stockholder's equity item.

At the end of its accounting period, December 31, 2011, Hsu's Financial Services has assets of $575,000 and stockholders' equity of $335,000. Using the accounting equation and considering each case independently, determine the following amounts. a. Hsu's liabilities as of December 31, 2011. b. Hsu's liabilities as of December 31, 2012, assuming that assets increased by $56,000 and stockholders' equity decreased by $32,000. c. Net income or net loss during 2012, assuming that as of December 31, 2012, assets were $592,000, liabilities were $450,000, and there were no additional capital stock sales or dividends paid in 2012.

How does receiving a bill to be paid next month for services received affect the accounting equation?

For each of the following companies, identify whether it is a service, merchandising, or manufacturing business. A. Dillards B. Time Warner Cable C. General Motors D. Netflix E. Stanley Steemer F. Sony G. Best Buy H. Banana Republic I. H \& R Block

At December 31, 2011, Martin Consultants has assets of $430,000 and liabilities of $205,000. Using the accounting equation and considering each case independently, determine the following: a. Total Stockholders' Equity as of December 31, 2011. b. Total Stockholders' Equity as of December 31, 2012, assuming that assets increased by $12,000 and liabilities increased by $15,000 in 2012. c. Total Stockholders' Equity as of December 31, 2012, assuming that assets decreased by $8,000 and liabilities increased by $14,000 during 2012.

Identify each of the following as either internal or external users of accounting information. A. Payroll Manager B. Bank C. President's Secretary D. Internal Revenue Service E. Raw Material Vendors F. Social Security Administration G. Health Insurance Provider H. Managerial Accountant

Generally accepted accounting principles regulate how and what financial information is reported by businesses.

The initials GAAP stand for

If the liabilities owed by a business total $300,000 and stockholder's equity is equal to $300,000, then the assets also total $300,000.

On May 7, Carpet Barn Company offered to pay $83,000 for land that had a selling price of $105,000. On May 15, Carpet Barn accepted a counteroffer of $95,000. On June 5, the land was assessed at a value of $115,000 for property tax purposes. On December 10, Carpet Barn Company was offered $135,000 for the land by another company. At what value should the land be recorded in Carpet Barn Company's records?

All of the following statements regarding the ratio of liabilities to stockholders' equity are true except