Question 1

An owner's cash investment in a business creates an asset (cash),a liability (note payable),and equity (owner investments).

Accepted Answer

A) True 
 B)False

Question 2

A sole proprietorship is a business owned by one or more persons.

Accepted Answer

A) True 
 B)False

Question 3

Sole proprietorships and partnerships are not subject to income tax in Canada.

Accepted Answer

A) True 
 B)False

Question 4

The rule that (1)requires revenue to be recognized at the time it is earned,(2)allows the inflow of assets associated with revenue to be in a form other than cash,and (3)measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services is called the:

Accepted Answer

A)  Going concern principle. 
B)  Cost principle. 
C)  Revenue recognition principle. 
D)  Monetary unit principle. 
E)  Business entity principle. 
A)  Going concern principle. 
B)  Cost principle. 
C)  Revenue recognition principle. 
D)  Monetary unit principle. 
E)  Business entity principle.

Question 5

A(n)___________ occurs when expenses are greater than revenues.

Accepted Answer

The answer of A(n)___________ occurs when expenses are greater than...

Question 6

A liability expressed by a written promise to make a future payment is usually called an account payable.

Accepted Answer

A) True 
 B)False

Question 7

Ethics and laws often differ.

Accepted Answer

A) True 
 B)False

Question 8

Although a proprietorship is not a separate legal entity,a partnership is.

Accepted Answer

A) True 
 B)False

Question 9

If the liabilities of a business increased $8,000 during a period of time and equity in the business decreased $4,000 during the same period,the assets of the business must have:

Accepted Answer

A)  Decreased $12,000. 
B)  Decreased $4,000. 
C)  Increased $12,000. 
D)  Increased $4,000. 
E)  Increased $6,000. 
A)  Decreased $12,000. 
B)  Decreased $4,000. 
C)  Increased $12,000. 
D)  Increased $4,000. 
E)  Increased $6,000.

Question 10

Dividends represent distributions of profits to the partners of a business.

Accepted Answer

A) True 
 B)False

Question 11

The accounting principle that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:

Accepted Answer

A)  Cost principle. 
B)  Business entity principle. 
C)  Going concern principle. 
D)  Monetary unit principle. 
E)  Revenue recognition principle. 
A)  Cost principle. 
B)  Business entity principle. 
C)  Going concern principle. 
D)  Monetary unit principle. 
E)  Revenue recognition principle.

Question 12

How does the going concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f

Question 13

Although,in a sole proprietorship,owner investments are not recorded as revenue,any withdrawals are recorded as expenses.

Accepted Answer

A) True 
 B)False

Question 14

The organization established to try to achieve global agreement on the use of a common set of accounting principles is called:

Accepted Answer

A)  Accounting Standards Board. 
B)  Abbreviated as IFRS. 
C)  International Accounting Standards Board. 
D)  Generally accepted accounting principles. 
E)  All of these answers are correct. 
A)  Accounting Standards Board. 
B)  Abbreviated as IFRS. 
C)  International Accounting Standards Board. 
D)  Generally accepted accounting principles. 
E)  All of these answers are correct.

Question 15

Blu Lightning Co.performed testing services for the Cheetah Co.Blu Lightning Co.billed Cheetah Co.$5,000.Enter the appropriate amounts into the accounting equation format.

Accepted Answer

Assets = Liabilities

Question 16

Businesses can take the following form(s):

Accepted Answer

A)  Sole proprietorship. 
B)  Not-for-profit. 
C)  Partnership. 
D)  Sole proprietorship and partnership. 
E)  All of these answers are correct. 
A)  Sole proprietorship. 
B)  Not-for-profit. 
C)  Partnership. 
D)  Sole proprietorship and partnership. 
E)  All of these answers are correct.

Question 17

Which of the following statements is true about assets?

Accepted Answer

A)  They are the properties or economic resources owned by the business. 
B)  They are available to provide future benefits to the business. 
C)  They can be intangible rights. 
D)  Ownership is shared between creditors and owners. 
E)  All of these answers are correct. 
A)  They are the properties or economic resources owned by the business. 
B)  They are available to provide future benefits to the business. 
C)  They can be intangible rights. 
D)  Ownership is shared between creditors and owners. 
E)  All of these answers are correct.

Question 18

Blu Disc paid its landlord $3,000 in cash for three months' rent in advance.Enter the appropriate amounts into the accounting equation format.

Accepted Answer

The answer of Blu Disc paid its landlord $3,000 in...

Question 19

The balance sheet is also called the statement of financial position because it shows the financial position of the business on a particular date.

Accepted Answer

A) True 
 B)False

Question 20

The FastForward Company balance sheet shows cash $5,000,accounts receivable $7,000,office equipment $3,000,and accounts payable $4,000.What is the amount of equity?

Accepted Answer

A)  $1,000. 
B)  $11,000. 
C)  $12,000. 
D)  $15,000. 
E)  $19,000. 
A)  $1,000. 
B)  $11,000. 
C)  $12,000. 
D)  $15,000. 
E)  $19,000.

An owner's cash investment in a business creates an asset (cash),a liability (note payable),and equity (owner investments).

A sole proprietorship is a business owned by one or more persons.

Sole proprietorships and partnerships are not subject to income tax in Canada.

A(n)___________ occurs when expenses are greater than revenues.

A liability expressed by a written promise to make a future payment is usually called an account payable.

Ethics and laws often differ.

Although a proprietorship is not a separate legal entity,a partnership is.

If the liabilities of a business increased $8,000 during a period of time and equity in the business decreased $4,000 during the same period,the assets of the business must have:

Dividends represent distributions of profits to the partners of a business.

The accounting principle that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:

How does the going concern principle affect reporting asset values of a business?

Although,in a sole proprietorship,owner investments are not recorded as revenue,any withdrawals are recorded as expenses.

The organization established to try to achieve global agreement on the use of a common set of accounting principles is called:

Blu Lightning Co.performed testing services for the Cheetah Co.Blu Lightning Co.billed Cheetah Co.$5,000.Enter the appropriate amounts into the accounting equation format.

Businesses can take the following form(s):

Which of the following statements is true about assets?

Blu Disc paid its landlord $3,000 in cash for three months' rent in advance.Enter the appropriate amounts into the accounting equation format.

The balance sheet is also called the statement of financial position because it shows the financial position of the business on a particular date.

The FastForward Company balance sheet shows cash $5,000,accounts receivable $7,000,office equipment $3,000,and accounts payable $4,000.What is the amount of equity?

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Receivables

Filters

Exam 1: Accounting in Business

An owner's cash investment in a business creates an asset (cash),a liability (note payable),and equity (owner investments).

A sole proprietorship is a business owned by one or more persons.

Sole proprietorships and partnerships are not subject to income tax in Canada.

A(n)___________ occurs when expenses are greater than revenues.

A liability expressed by a written promise to make a future payment is usually called an account payable.

Ethics and laws often differ.

Although a proprietorship is not a separate legal entity,a partnership is.

If the liabilities of a business increased $8,000 during a period of time and equity in the business decreased $4,000 during the same period,the assets of the business must have:

Dividends represent distributions of profits to the partners of a business.

The accounting principle that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold,unless evidence shows that it will not continue,is the:

How does the going concern principle affect reporting asset values of a business?

Although,in a sole proprietorship,owner investments are not recorded as revenue,any withdrawals are recorded as expenses.

The organization established to try to achieve global agreement on the use of a common set of accounting principles is called:

Blu Lightning Co.performed testing services for the Cheetah Co.Blu Lightning Co.billed Cheetah Co.$5,000.Enter the appropriate amounts into the accounting equation format.

Businesses can take the following form(s):

Which of the following statements is true about assets?

Blu Disc paid its landlord $3,000 in cash for three months' rent in advance.Enter the appropriate amounts into the accounting equation format.

The balance sheet is also called the statement of financial position because it shows the financial position of the business on a particular date.

The FastForward Company balance sheet shows cash $5,000,accounts receivable $7,000,office equipment $3,000,and accounts payable $4,000.What is the amount of equity?

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Receivables

Filters