Question 1

Describe the three important guidelines for revenue recognition.

Accepted Answer

The three important guidelines for reven

Question 2

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Accepted Answer

A) True 
 B)False

Question 3

What is the balance sheet? What is its purpose?

Accepted Answer

The balance sheet is one of the four req

Question 4

To include the personal assets and transactions of a business's stockholders in the records and reports of the business would be in conflict with the:

Accepted Answer

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

Question 5

For each of the following transactions, identify the effects as reflected in the accounting equation. Use "+" to indicate an increase and "-" to indicate a decrease. Use "A", "L", and "E" to indicate assets, liabilities, and equity, respectively. Part A has been completed as an example.

Accepted Answer

a. +A +E
b. +A +L
c.

Question 6

Operating activities include long-term borrowing and repaying cash from lenders, and cash investments or dividends to stockholders.

Accepted Answer

A) True 
 B)False

Question 7

Accounting is an information and measurement system that does all of the following except:

Accepted Answer

A) Identifies business activities. 
B) Records business activities. 
C) Communicates business activities. 
D) Eliminates the need for interpreting financial data. 
E) Helps people make better decisions. 
A) Identifies business activities. 
B) Records business activities. 
C) Communicates business activities. 
D) Eliminates the need for interpreting financial data. 
E) Helps people make better decisions.

Question 8

Soo Lin, the sole stockholder, began an Internet Consulting practice organized as a corporation and completed these transactions during April of the current year:   Show the effects of the above transactions on the accounting equation of Soo Lin, Consultant. Use the following format for your answers. The first item is shown as an example.
Increase = I Decrease = D No effect = N

Accepted Answer

The answer of Soo Lin, the sole stockholder, began an...

Question 9

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.

Accepted Answer

A) $61,000 increase. 
B) $37,000 increase. 
C) $7,000 decrease. 
D) $7,000 increase. 
E) $34,000 decreasE.Net Increase/(Decrease) in Cash = Cash Flows from Operating Activities + Cash Flows from Investing Activities + Cash Flows from Financing Activities 
A) $61,000 increase. 
B) $37,000 increase. 
C) $7,000 decrease. 
D) $7,000 increase. 
E) $34,000 decreasE.Net Increase/(Decrease) in Cash = Cash Flows from Operating Activities + Cash Flows from Investing Activities + Cash Flows from Financing Activities

Question 10

If assets are $365,000 and equity is $120,000, then liabilities are:

Accepted Answer

A) $120,000. 
B) $245,000. 
C) $365,000. 
D) $485,000. 
E) $610,000. 
A) $120,000. 
B) $245,000. 
C) $365,000. 
D) $485,000. 
E) $610,000.

Question 11

Rent expense appears on which of the following statements?

Accepted Answer

A) Balance sheet. 
B) Income statement. 
C) Statement of retained earnings. 
D) Statement of periodic expenses. 
E) Statement of cash flows only. 
A) Balance sheet. 
B) Income statement. 
C) Statement of retained earnings. 
D) Statement of periodic expenses. 
E) Statement of cash flows only.

Question 12

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Accepted Answer

A) True 
 B)False

Question 13

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

Accepted Answer

A) True 
 B)False

Question 14

Alpha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Accepted Answer

A) Assets increase by $75,000 and expenses increase by $75,000. 
B) Assets increase by $75,000 and expenses decrease by $75,000. 
C) Liabilities increase by $75,000 and expenses decrease by $75,000. 
D) Assets decrease by $75,000 and expenses decrease by $75,000. 
E) Assets increase by $75,000 and liabilities increase by $75,000. 
A) Assets increase by $75,000 and expenses increase by $75,000. 
B) Assets increase by $75,000 and expenses decrease by $75,000. 
C) Liabilities increase by $75,000 and expenses decrease by $75,000. 
D) Assets decrease by $75,000 and expenses decrease by $75,000. 
E) Assets increase by $75,000 and liabilities increase by $75,000.

Question 15

Use the following information as of December 31 to determine equity.

Accepted Answer

A) $57,000. 
B) $141,000. 
C) $297,000. 
D) $438,000. 
E) $579,000. 
A) $57,000. 
B) $141,000. 
C) $297,000. 
D) $438,000. 
E) $579,000.

Question 16

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Accepted Answer

A) Assets increase $4,500 and liabilities decrease $4,500. 
B) Equity decreases $4,500 and liabilities increase $4,500. 
C) Liabilities decrease $4,500 and assets increase $4,500. 
D) Assets increase $4,500 and liabilities increase $4,500. 
E) Equity increases $4,500 and liabilities decrease $4,500. 
A) Assets increase $4,500 and liabilities decrease $4,500. 
B) Equity decreases $4,500 and liabilities increase $4,500. 
C) Liabilities decrease $4,500 and assets increase $4,500. 
D) Assets increase $4,500 and liabilities increase $4,500. 
E) Equity increases $4,500 and liabilities decrease $4,500.

Question 17

Generally the lower the risk, the higher the return that can be expected.

Accepted Answer

A) True 
 B)False

Question 18

The assumption that requires that a business be accounted for separately from its owners is the __________________ assumption.

Accepted Answer

The answer of The assumption that requires that a business...

Question 19

Net Income:

Accepted Answer

A) Decreases equity. 
B) Represents the amount of assets stockholders put into a business. 
C) Equals assets minus liabilities. 
D) Is the excess of revenues over expenses. 
E) Represents stockholders' claims against assets. 
A) Decreases equity. 
B) Represents the amount of assets stockholders put into a business. 
C) Equals assets minus liabilities. 
D) Is the excess of revenues over expenses. 
E) Represents stockholders' claims against assets.

Question 20

Prepare a December 31 balance sheet in proper form for Cane Property Management, Inc. using the following accounts and amounts:

Accepted Answer

The answer of Prepare a December 31 balance sheet in...

Describe the three important guidelines for revenue recognition.

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

What is the balance sheet? What is its purpose?

To include the personal assets and transactions of a business's stockholders in the records and reports of the business would be in conflict with the:

For each of the following transactions, identify the effects as reflected in the accounting equation. Use "+" to indicate an increase and "-" to indicate a decrease. Use "A", "L", and "E" to indicate assets, liabilities, and equity, respectively. Part A has been completed as an example.

Operating activities include long-term borrowing and repaying cash from lenders, and cash investments or dividends to stockholders.

Accounting is an information and measurement system that does all of the following except:

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.

If assets are $365,000 and equity is $120,000, then liabilities are:

Rent expense appears on which of the following statements?

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

Alpha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Use the following information as of December 31 to determine equity.

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Generally the lower the risk, the higher the return that can be expected.

The assumption that requires that a business be accounted for separately from its owners is the __________________ assumption.

Net Income:

Prepare a December 31 balance sheet in proper form for Cane Property Management, Inc. using the following accounts and amounts:

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Exam 1: Introducing Financial Accounting

Describe the three important guidelines for revenue recognition.

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

What is the balance sheet? What is its purpose?

To include the personal assets and transactions of a business's stockholders in the records and reports of the business would be in conflict with the:

For each of the following transactions, identify the effects as reflected in the accounting equation. Use "+" to indicate an increase and "-" to indicate a decrease. Use "A", "L", and "E" to indicate assets, liabilities, and equity, respectively. Part A has been completed as an example.

Operating activities include long-term borrowing and repaying cash from lenders, and cash investments or dividends to stockholders.

Accounting is an information and measurement system that does all of the following except:

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.

If assets are $365,000 and equity is $120,000, then liabilities are:

Rent expense appears on which of the following statements?

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

Alpha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Use the following information as of December 31 to determine equity.

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Generally the lower the risk, the higher the return that can be expected.

The assumption that requires that a business be accounted for separately from its owners is the __________________ assumption.

Net Income:

Prepare a December 31 balance sheet in proper form for Cane Property Management, Inc. using the following accounts and amounts:

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters