Question 1

Explain the accounting equation and define its terms.

Accepted Answer

The accounting equation is stated as: As

Question 2

The question of when revenue should be recognized on the income statement according to GAAP is addressed by the:

Accepted Answer

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

Question 3

From the information given below, prepare a November income statement, a November statement of retained earnings, and a November 30 balance sheet. On November 1 of the current year, Victoria Garza began Garza Décor, Inc. with an initial investment of $50,000 cash. On November 30, her records showed the following (alphabetically arranged) items and amounts.

Accepted Answer

The answer of From the information given below, prepare a...

Question 4

All of the following are classified as liabilities except:

Accepted Answer

A) Accounts Receivable. 
B) Notes Payable. 
C) Wages Payable. 
D) Accounts Payable. 
E) Taxes Payable. 
A) Accounts Receivable. 
B) Notes Payable. 
C) Wages Payable. 
D) Accounts Payable. 
E) Taxes Payable.

Question 5

The Superior Company acquired a building for $500,000. The building was appraised at a value of $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Superior to record the building on its records at $500,000?

Accepted Answer

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

Question 6

The records of Roadmaster Auto Rentals, Inc. show the following information as of December 31. The owner, Rob Fletcher, the sole stockholder, received a dividend of $52,000 during the year. Prepare a December income statement, a December statement of retained earnings, and a December 30 balance sheet.

Accepted Answer

The answer of The records of Roadmaster Auto Rentals, Inc....

Question 7

Cragmont has beginning equity of $277,000, net income of $63,000, dividends of $25,000, and no additional investments by stockholders during the period. Its ending equity is:

Accepted Answer

A) $365,000. 
B) $239,000. 
C) $189,000. 
D) $315,000. 
E) $277,000. 
A) $365,000. 
B) $239,000. 
C) $189,000. 
D) $315,000. 
E) $277,000.

Question 8

Match each of the following items 1 through 8 with the financial statement a through d in which each item would most likely appear. An item may appear on more than one statement.
a. Income statement
b. Statement of retained earnings
c. Balance sheet
d. Statement of cash flows
_____ 1. Assets.
_____ 2. Dividends.
_____ 3. Revenues.
_____ 4. Cash from investing activities.
_____ 5. Expenses.
_____ 6. Liabilities.
_____ 7. Cash from operating activities.
_____ 8. Cash from financing activities.

Accepted Answer

1. C; 2. B

Question 9

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Accepted Answer

A) Going-concern assumption. 
B) Matching principle. 
C) Cost principle. 
D) Business entity assumption. 
E) Consideration assumption. 
A) Going-concern assumption. 
B) Matching principle. 
C) Cost principle. 
D) Business entity assumption. 
E) Consideration assumption.

Question 10

An accounting information system communicates data to help users make better decisions.

Accepted Answer

A) True 
 B)False

Question 11

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities. Which of the following transactions could have caused that effect?

Accepted Answer

A) Cash was received from providing services to a customer. 
B) Cash was received in exchange for common stock. 
C) Equipment was purchased on credit. 
D) Supplies were purchased for cash. 
E) Advertising expense for the month was paid in cash. 
A) Cash was received from providing services to a customer. 
B) Cash was received in exchange for common stock. 
C) Equipment was purchased on credit. 
D) Supplies were purchased for cash. 
E) Advertising expense for the month was paid in cash.

Question 12

Internal users include lenders, shareholders, brokers and managers.

Accepted Answer

A) True 
 B)False

Question 13

A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

Accepted Answer

$570,000. The cost principle r

Question 14

Investing activities are the acquiring and disposing of resources that an organization uses to acquire and sell its products or services.

Accepted Answer

A) True 
 B)False

Question 15

Internal operating activities include research and development, distribution, and human resources.

Accepted Answer

A) True 
 B)False

Question 16

Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long-used accounting practice.

Accepted Answer

A) True 
 B)False

Question 17

On August 31 of the current year, the assets and liabilities of Gladstone, Inc. are as follows: Cash $30,000; Supplies, $600; Equipment, $10,000; Accounts Payable, $8,500. What is the amount of stockholders' equity as of August 31 of the current year?

Accepted Answer

A) $49,100 
B) $32,100 
C) $12,100 
D) $10,900 
E) $30,900 
A) $49,100 
B) $32,100 
C) $12,100 
D) $10,900 
E) $30,900

Question 18

The ______________ assumption assumes business will continue operating indefinitely instead of being closed or sold.

Accepted Answer

The answer of The ______________ assumption assumes business will continue...

Question 19

The primary objective of financial accounting is to:

Accepted Answer

A) Serve the decision-making needs of internal users. 
B) Provide accounting information that serves external users. 
C) Monitor and control company activities. 
D) Provide information on both the costs and benefits of looking after products and services. 
E) Know what, when, and how much product to produce. 
A) Serve the decision-making needs of internal users. 
B) Provide accounting information that serves external users. 
C) Monitor and control company activities. 
D) Provide information on both the costs and benefits of looking after products and services. 
E) Know what, when, and how much product to produce.

Question 20

Risk is:

Accepted Answer

A) Net income divided by average total assets. 
B) The reward for investment. 
C) The uncertainty about the return expected to be earned. 
D) Unrelated to return expected. 
E) Derived from the idea of getting something back from an investment. 
A) Net income divided by average total assets. 
B) The reward for investment. 
C) The uncertainty about the return expected to be earned. 
D) Unrelated to return expected. 
E) Derived from the idea of getting something back from an investment.

Explain the accounting equation and define its terms.

The question of when revenue should be recognized on the income statement according to GAAP is addressed by the:

All of the following are classified as liabilities except:

The Superior Company acquired a building for $500,000. The building was appraised at a value of $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Superior to record the building on its records at $500,000?

Cragmont has beginning equity of $277,000, net income of $63,000, dividends of $25,000, and no additional investments by stockholders during the period. Its ending equity is:

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

An accounting information system communicates data to help users make better decisions.

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities. Which of the following transactions could have caused that effect?

Internal users include lenders, shareholders, brokers and managers.

A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

Investing activities are the acquiring and disposing of resources that an organization uses to acquire and sell its products or services.

Internal operating activities include research and development, distribution, and human resources.

Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long-used accounting practice.

On August 31 of the current year, the assets and liabilities of Gladstone, Inc. are as follows: Cash $30,000; Supplies, $600; Equipment, $10,000; Accounts Payable, $8,500. What is the amount of stockholders' equity as of August 31 of the current year?

The ______________ assumption assumes business will continue operating indefinitely instead of being closed or sold.

The primary objective of financial accounting is to:

Risk is:

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

Explain the accounting equation and define its terms.

The question of when revenue should be recognized on the income statement according to GAAP is addressed by the:

All of the following are classified as liabilities except:

The Superior Company acquired a building for $500,000. The building was appraised at a value of $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Superior to record the building on its records at $500,000?

Cragmont has beginning equity of $277,000, net income of $63,000, dividends of $25,000, and no additional investments by stockholders during the period. Its ending equity is:

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

An accounting information system communicates data to help users make better decisions.

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities. Which of the following transactions could have caused that effect?

Internal users include lenders, shareholders, brokers and managers.

A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

Investing activities are the acquiring and disposing of resources that an organization uses to acquire and sell its products or services.

Internal operating activities include research and development, distribution, and human resources.

Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long-used accounting practice.

On August 31 of the current year, the assets and liabilities of Gladstone, Inc. are as follows: Cash $30,000; Supplies, $600; Equipment, $10,000; Accounts Payable, $8,500. What is the amount of stockholders' equity as of August 31 of the current year?

The ______________ assumption assumes business will continue operating indefinitely instead of being closed or sold.

The primary objective of financial accounting is to:

Risk is:

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