Exam 1: Introduction to Accounting and Business

For accounting purposes, the business entity should be considered separate from its owners in which of the following forms of business?

Receiving a bill or otherwise being notified that an amount is owed is not recorded until the amount is paid.

Which of the following best describes accounting?

The accountant for Franklin Company prepared the following list of account balances from the company's records for the year ended December 31, 2011: Determine the total assets at the end of 2011 for Franklin Company.

Give the major disadvantage of disregarding the cost concept and constantly revaluing assets based on appraisals and opinions.

Purchasing supplies on account increases liabilities and decreases equity.

Some of the major fraudulent acts by senior executives started as what they considered to be small ethical lapses which grew out of control.

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total stockholder's equity was a $200,000 increase.

Which of the following financial statements reports information as of a specific date?

An income statement is a summary of the revenues and expenses of a business as of a specific date.

Who among the following uses financial reports?

From the following list of accounts taken from Lamar's accounting records, identify those that would appear on the income statement.

Which of the following group of companies are all examples of a merchandising business?

Which of the following is a body established by the Sarbanes-Oxley Act of 2002 for the accounting professionals?

Receiving payments on an account receivable increases both equity and assets.

Amos Moving Services' account balances at March 31, 2014, the end of the current year, are listed below. The Retained Earnings balance was $180,000 at April 1, 2013, the beginning of the current year. Based on the data provided for Amos Moving Services, prepare a retained earnings statement for the year ended March 31, 2014.

Paying an account payable increases liabilities and decreases assets.

The main objective of a not-for-profit business is not to make a profit.

Companies like Enron, WorldCom, and Tyco International, Ltd. have been caught in the midst of ethical lapses that led to fines, firings, and criminal and/or civil prosecution. List and briefly describe three factors that are responsible for what went wrong in these companies.

CPA Associates was organized on January 1, 2011, as a corporation. List the errors that you find in the following financial statements and prepare the corrected statements for the three months ended March 31, 2011.