Question 1

Land, originally purchased for $30,000, is sold for $62,000 in cash. What is the effect of the sale on the accounting equation?

Accepted Answer

A)  assets increase $62,000; owner's equity increases $62,000 
B)  assets increase $32,000; owner's equity increases $32,000 
C)  assets increase $62,000; liabilities decrease $30,000; owner's equity increases $32,000 
D)  assets increase $30,000; no change for liabilities; owner's equity increases $62,000 
A)  assets increase $62,000; owner's equity increases $62,000 
B)  assets increase $32,000; owner's equity increases $32,000 
C)  assets increase $62,000; liabilities decrease $30,000; owner's equity increases $32,000 
D)  assets increase $30,000; no change for liabilities; owner's equity increases $62,000 B

Question 2

Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of owner's equity (OE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?

Accepted Answer

A)  I,OE, B 
B)  B, I, OE 
C)  OE, I, B 
D)  B,OE, I 
A)  I,OE, B 
B)  B, I, OE 
C)  OE, I, B 
D)  B,OE, I A

Question 3

Indicate how the following transactions affect the accounting equation:
(a) The purchase of supplies on account.
(b) The purchase of supplies for cash.
(c) A withdraw by the owner to pay personal expenses.
(d) Revenues received in cash.
(e) Revenues received on account.

Accepted Answer

(a) Assets increase; liabilities increase
(b) No effect
(c) Assets decrease; owner's equity decreases
(d) Assets increase; owner's equity increases
(e) Assets increase; owner's equity increases

Question 4

The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following are guidelines for behaving ethically?

Accepted Answer

A)  I and II. 
B)  II and III. 
C)  I and III. 
D)  I, II, and III. 
A)  I and II. 
B)  II and III. 
C)  I and III. 
D)  I, II, and III.

Question 6

Explain the meaning of:
(a) the objectivity concept and
(b) the unit of measure concept

Accepted Answer

(a) The objectivity concept requires tha

Question 7

Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

The answer of The accountant for Franklin Company prepared the...

Question 9

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

Accepted Answer

1. Identify users.
2. Assess users' info

Question 10

If net income for a proprietorship was $50,000, the owner withdrew $20,000 in cash and the owner invested $10,000 in cash, the capital of the owner increased by $40,000.

Accepted Answer

A) True 
 B)False

Question 11

Only large companies such as Wal-Mart, JCP, General Motors, and the Bank of America can be organized as corporations.

Accepted Answer

A) True 
 B)False

Question 12

What is the major difference between the objective of financial accounting and the objective of managerial accounting?

Accepted Answer

The objective of financial acc

Question 13

The assets and liabilities of S&P Day Spa at December 31, 2014 and its revenue and expenses for the year are listed below. The capital of the owner was $68,000 at January 1, 2014. The owner invested an additional $10,000 during the year.
   Prepare a balance sheet for the year ended December 31, 2014.

Accepted Answer

The answer of The assets and liabilities of S&P Day...

Question 14

Earning revenue

Accepted Answer

A)  increases assets, increases owner's equity. 
B)  increases assets, decreases owner's equity 
C)  increases one asset, decreases another asset 
D)  decreases assets, increases liabilities 
A)  increases assets, increases owner's equity. 
B)  increases assets, decreases owner's equity 
C)  increases one asset, decreases another asset 
D)  decreases assets, increases liabilities

Question 15

The assets and liabilities of Amos Moving Services at March 31, 2014, the end of the current year, and its revenue and expenses for the year are listed below. The capital of the owner was $180,000 at April 1, 2013, the beginning of the current year. Mr. Amos invested an additional $25,000 in the business during the year.
   Prepare a balance sheet for the current year ended March 31, 2014.

Accepted Answer

The answer of The assets and liabilities of Amos Moving...

Question 16

A statement of owner's equity reports the changes in the owner's equity for a period of time.

Accepted Answer

A) True 
 B)False

Question 17

Explain the interrelationship between the Balance Sheet and the Statement of Cash Flows.

Accepted Answer

The cash reported on the balan

Question 18

How does paying a liability in cash affect the accounting equation?

Accepted Answer

A)  assets increase; liabilities decrease 
B)  assets increase; liabilities increase 
C)  assets decrease; liabilities decrease 
D)  liabilities decrease; owner's equity increases 
A)  assets increase; liabilities decrease 
B)  assets increase; liabilities increase 
C)  assets decrease; liabilities decrease 
D)  liabilities decrease; owner's equity increases

Question 19

Gomez Service Company paid their first installment on their Notes Payable in the amount of $2,000. How will this transaction affect the accounting equation?

Accepted Answer

A)  Increase Liabilities (Notes Payable) and decrease Assets (Cash) 
B)  Decrease Assets (Cash) and decrease Owner's equity (Note Payable Expense) 
C)  Decrease Assets (Cash) and decrease Assets (Notes Receivable) 
D)  Decrease Assets (Cash) and decrease Liabilities (Notes Payable) 
A)  Increase Liabilities (Notes Payable) and decrease Assets (Cash) 
B)  Decrease Assets (Cash) and decrease Owner's equity (Note Payable Expense) 
C)  Decrease Assets (Cash) and decrease Assets (Notes Receivable) 
D)  Decrease Assets (Cash) and decrease Liabilities (Notes Payable)

Question 20

Collins Landscape Company purchased various landscaping supplies on account to be used for landscape designs for their customers. How will this business transaction affect the accounting equation?

Accepted Answer

Increase Assets (Sup

Exam 1: Introduction to Accounting and Business

Land, originally purchased for $30,000, is sold for $62,000 in cash. What is the effect of the sale on the accounting equation?

Indicate how the following transactions affect the accounting equation: (a) The purchase of supplies on account. (b) The purchase of supplies for cash. (c) A withdraw by the owner to pay personal expenses. (d) Revenues received in cash. (e) Revenues received on account.

The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.

Which of the following are guidelines for behaving ethically?

Explain the meaning of: (a) the objectivity concept and (b) the unit of measure concept

Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.

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.

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

If net income for a proprietorship was $50,000, the owner withdrew $20,000 in cash and the owner invested $10,000 in cash, the capital of the owner increased by $40,000.

Only large companies such as Wal-Mart, JCP, General Motors, and the Bank of America can be organized as corporations.

What is the major difference between the objective of financial accounting and the objective of managerial accounting?

The assets and liabilities of S&P Day Spa at December 31, 2014 and its revenue and expenses for the year are listed below. The capital of the owner was $68,000 at January 1, 2014. The owner invested an additional $10,000 during the year. Prepare a balance sheet for the year ended December 31, 2014.

Earning revenue

A statement of owner's equity reports the changes in the owner's equity for a period of time.

Explain the interrelationship between the Balance Sheet and the Statement of Cash Flows.

How does paying a liability in cash affect the accounting equation?

Gomez Service Company paid their first installment on their Notes Payable in the amount of $2,000. How will this transaction affect the accounting equation?

Collins Landscape Company purchased various landscaping supplies on account to be used for landscape designs for their customers. How will this business transaction affect the accounting equation?

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Filters