Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Purchasing supplies on account increases liabilities and decreases equity.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) both the retained earnings statement and the income statement 
B) only the retained earnings statement 
C) both the retained earnings statement and the balance sheet 
D) both the retained earnings statement and the statement of cash flows 
A) both the retained earnings statement and the income statement 
B) only the retained earnings statement 
C) both the retained earnings statement and the balance sheet 
D) both the retained earnings statement and the statement of cash flows

Question 4

An account receivable is typically classified as a revenue.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) assets decrease;stockholders' equity decreases 
B) assets increase;liabilities increase 
C) liabilities increase;stockholders' equity increases 
D) liabilities increase;stockholders' equity decreases 
A) assets decrease;stockholders' equity decreases 
B) assets increase;liabilities increase 
C) liabilities increase;stockholders' equity increases 
D) liabilities increase;stockholders' equity decreases

Question 6

Declaring and paying cash dividends

Accepted Answer

A) increase expenses 
B) decrease expenses 
C) increase cash 
D) decrease stockholders' equity 
A) increase expenses 
B) decrease expenses 
C) increase cash 
D) decrease stockholders' equity

Question 7

If total assets decreased by $30,000 during a specific period and stockholder's equity decreased by $35,000 during the same period,the period's change in total liabilities was an $65,000 increase.

Accepted Answer

A) True 
 B)False

Question 8

Denzel Jones is the major stockholder of Crystal Cleaning Company.Recently,Denzel received $10,000 of dividends from Crystal Cleaning.After receiving the dividends,he contributed $6,000,in his name,to Habitat for Humanity.The contribution of $6,000 should be recorded on the accounting records of which of the following entities?

Accepted Answer

A) Crystal Cleaning and Habitat for Humanity 
B) Denzel Jones' personal records and Habitat for Humanity 
C) Denzel Jones' personal records and Crystal Cleaning 
D) Denzel Jones' personal records,Crystal Cleaning,and Habitat for Humanity 
A) Crystal Cleaning and Habitat for Humanity 
B) Denzel Jones' personal records and Habitat for Humanity 
C) Denzel Jones' personal records and Crystal Cleaning 
D) Denzel Jones' personal records,Crystal Cleaning,and Habitat for Humanity

Question 9

An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a

Accepted Answer

A) proprietorship 
B) corporation 
C) partnership 
D) governmental unit 
A) proprietorship 
B) corporation 
C) partnership 
D) governmental unit

Question 10

Two common areas of accounting that respectively provide information to internal and external users are

Accepted Answer

A) forensic accounting and financial accounting 
B) managerial accounting and financial accounting 
C) managerial accounting and environmental accounting 
D) financial accounting and tax accounting systems 
A) forensic accounting and financial accounting 
B) managerial accounting and financial accounting 
C) managerial accounting and environmental accounting 
D) financial accounting and tax accounting systems

Question 11

The Sarbanes-Oxley Act of 2002 prohibits employment of auditors by their clients for what period after their last audit of the client?

Accepted Answer

A) indefinitely 
B) one year 
C) two years 
D) none of these 
A) indefinitely 
B) one year 
C) two years 
D) none of these

Question 12

Owners' rights to assets rank ahead of creditors' rights to assets.

Accepted Answer

A) True 
 B)False

Question 13

Revenue is earned only when money is received.

Accepted Answer

A) True 
 B)False

Question 14

Transactions affecting stockholders' equity include

Accepted Answer

A) shares of capital stock issued to stockholders and payment of liabilities 
B) shares of capital stock issued to stockholders,dividends declared and paid to stockholders,revenues,and expenses 
C) shares of capital stock issued to stockholders,revenues,expenses,and collection of accounts receivable 
D) dividends declared and paid to stockholders,revenues,expenses,and purchases of supplies on account 
A) shares of capital stock issued to stockholders and payment of liabilities 
B) shares of capital stock issued to stockholders,dividends declared and paid to stockholders,revenues,and expenses 
C) shares of capital stock issued to stockholders,revenues,expenses,and collection of accounts receivable 
D) dividends declared and paid to stockholders,revenues,expenses,and purchases of supplies on account

Question 15

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.
 $\begin{array}{llll}
 & \text { Asssets } & \text { Liabilities } \
\text { Beginning of year }& \$ 305,000 & \$ 200,000 \
\text { End of year } & 365,000 & 230,000
\end{array}$ 
Calculate the net income for the year.

Accepted Answer

$52,000
 @#IMG-DLM& Based on the changes in assets

Question 16

If total liabilities decreased by $46,000 during a period of time and stockholders' equity increased by $60,000 during the same period,the amount and direction (increase or decrease)of the period's change in total assets is

Accepted Answer

A) $106,000 increase 
B) $14,000 increase 
C) $14,000 decrease 
D) $106,000 decrease 
A) $106,000 increase 
B) $14,000 increase 
C) $14,000 decrease 
D) $106,000 decrease

Question 17

The main objective for all businesses is to maximize unrealized profits.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) Makes up 10% of business organizations in the United States. 
B) Combines the attributes of a partnership and a corporation. 
C) Provides tax and legal liability advantages to the owners. 
D) All are correct. 
A) Makes up 10% of business organizations in the United States. 
B) Combines the attributes of a partnership and a corporation. 
C) Provides tax and legal liability advantages to the owners. 
D) All are correct.

Question 19

Donner Company is selling a piece of land adjacent to their business.An appraisal reported the market value of the land to be $220,000.The Focus Company initially offered to buy the land for $177,000.The companies settled on a purchase price of $212,000.On the same day,another piece of land on the same block sold for $232,000.Under the cost concept,what is the amount that will be used to record this transaction in the accounting records?

Accepted Answer

A) $177,000 
B) $212,000 
C) $220,000 
D) $232,000 
A) $177,000 
B) $212,000 
C) $220,000 
D) $232,000

Question 20

Earning revenue

Accepted Answer

A) increases assets,increases stockholders' equity 
B) increases assets,decreases stockholders' equity 
C) increases one asset,decreases another asset 
D) decreases assets,increases liabilities 
A) increases assets,increases stockholders' equity 
B) increases assets,decreases stockholders' equity 
C) increases one asset,decreases another asset 
D) decreases assets,increases liabilities

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

Purchasing supplies on account increases liabilities and decreases equity.

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

An account receivable is typically classified as a revenue.

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

Declaring and paying cash dividends

If total assets decreased by $30,000 during a specific period and stockholder's equity decreased by $35,000 during the same period,the period's change in total liabilities was an $65,000 increase.

An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a

Two common areas of accounting that respectively provide information to internal and external users are

The Sarbanes-Oxley Act of 2002 prohibits employment of auditors by their clients for what period after their last audit of the client?

Owners' rights to assets rank ahead of creditors' rights to assets.

Revenue is earned only when money is received.

Transactions affecting stockholders' equity include

If total liabilities decreased by $46,000 during a period of time and stockholders' equity increased by $60,000 during the same period,the amount and direction (increase or decrease)of the period's change in total assets is

The main objective for all businesses is to maximize unrealized profits.

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

Earning revenue

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 1: Introduction to Accounting and Business

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

Purchasing supplies on account increases liabilities and decreases equity.

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

An account receivable is typically classified as a revenue.

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

Declaring and paying cash dividends

If total assets decreased by $30,000 during a specific period and stockholder's equity decreased by $35,000 during the same period,the period's change in total liabilities was an $65,000 increase.

An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a

Two common areas of accounting that respectively provide information to internal and external users are

The Sarbanes-Oxley Act of 2002 prohibits employment of auditors by their clients for what period after their last audit of the client?

Owners' rights to assets rank ahead of creditors' rights to assets.

Revenue is earned only when money is received.

Transactions affecting stockholders' equity include

If total liabilities decreased by $46,000 during a period of time and stockholders' equity increased by $60,000 during the same period,the amount and direction (increase or decrease)of the period's change in total assets is

The main objective for all businesses is to maximize unrealized profits.

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

Earning revenue

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters