Question 1

Prevor Corporation reports the following account balances at the end of its first year of operation:   Prevor's total liabilities equal:

Accepted Answer

A) $46,500. 
B) $42,500. 
C) $50,000. 
D) $72,500. 
E) $30,000. 
A) $46,500. 
B) $42,500. 
C) $50,000. 
D) $72,500. 
E) $30,000.

Question 2

A stockholder's investment in a business normally creates an asset (cash), a liability (note payable), and stockholders' equity (investment).

Accepted Answer

A) True 
 B)False

Question 3

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

Accepted Answer

A) Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000. 
B) Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000. 
C) Assets would decrease $38,000 and liabilities would decrease $38,000. 
D) There would be no effect on the accounts because the accounts are affected by the same amount. 
E) Assets would increase $38,000 and liabilities would decrease $38,000. 
A) Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000. 
B) Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000. 
C) Assets would decrease $38,000 and liabilities would decrease $38,000. 
D) There would be no effect on the accounts because the accounts are affected by the same amount. 
E) Assets would increase $38,000 and liabilities would decrease $38,000.

Question 4

Common stock is an increase in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 5

A balance sheet lists:

Accepted Answer

A) The types and amounts of the revenues and expenses of a business. 
B) Only the information about what happened to equity during a time period. 
C) The types and amounts of assets, liabilities, and equity of a business as of a specific date. 
D) The inflows and outflows of cash during the period. 
E) The assets and liabilities of a company but not the retained earnings. 
A) The types and amounts of the revenues and expenses of a business. 
B) Only the information about what happened to equity during a time period. 
C) The types and amounts of assets, liabilities, and equity of a business as of a specific date. 
D) The inflows and outflows of cash during the period. 
E) The assets and liabilities of a company but not the retained earnings.

Question 6

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Accepted Answer

A) True 
 B)False

Question 7

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?

Accepted Answer

A) Assets would decrease $2,000 and liabilities would decrease $2,000. 
B) Assets would decrease $2,000 and equity would decrease $2,000. 
C) Assets would increase $2,000 and equity would increase $2,000. 
D) Assets would increase $2,000 and liabilities would increase $2,000. 
E) Liabilities would decrease $2,000 and equity would increase $2,000. 
A) Assets would decrease $2,000 and liabilities would decrease $2,000. 
B) Assets would decrease $2,000 and equity would decrease $2,000. 
C) Assets would increase $2,000 and equity would increase $2,000. 
D) Assets would increase $2,000 and liabilities would increase $2,000. 
E) Liabilities would decrease $2,000 and equity would increase $2,000.

Question 8

A resource that the stockholder receives from the company is called a(n):

Accepted Answer

A) Liability. 
B) Dividend. 
C) Expense. 
D) Common stock. 
E) Investment. 
A) Liability. 
B) Dividend. 
C) Expense. 
D) Common stock. 
E) Investment.

Question 9

Owner financing refers to resources contributed by creditors or lenders.

Accepted Answer

A) True 
 B)False

Question 10

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Accepted Answer

The answer of Congress passed the ______________________ to help curb...

Question 11

Objectivity means that financial information is supported by independent, unbiased evidence.

Accepted Answer

A) True 
 B)False

Question 12

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

Accepted Answer

A) Assets increase $1,300 and liabilities decrease $1,300. 
B) One asset increases $1,300 and another asset decreases $1,300, causing no effect. 
C) Assets decrease $1,300 and equity decreases $1,300. 
D) Assets decrease $1,300 and equity increases $1,300. 
E) Assets increase $1,300 and liabilities increase $1,300. 
A) Assets increase $1,300 and liabilities decrease $1,300. 
B) One asset increases $1,300 and another asset decreases $1,300, causing no effect. 
C) Assets decrease $1,300 and equity decreases $1,300. 
D) Assets decrease $1,300 and equity increases $1,300. 
E) Assets increase $1,300 and liabilities increase $1,300.

Question 13

What distinguishes liabilities from equity?

Accepted Answer

Liabilities are creditors' claims on ass

Question 14

Planning involves defining an organization's ideas, goals, and actions.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following purposes would financial statements serve for external users?

Accepted Answer

A) To find information about projected costs and revenues of proposed products. 
B) To assess employee performance and compensation. 
C) To assist in monitoring consumer needs and price concerns. 
D) To fulfill regulatory requirements for companies whose stock is sold to the public. 
E) To determine purchasing needs. 
A) To find information about projected costs and revenues of proposed products. 
B) To assess employee performance and compensation. 
C) To assist in monitoring consumer needs and price concerns. 
D) To fulfill regulatory requirements for companies whose stock is sold to the public. 
E) To determine purchasing needs.

Question 16

At the beginning of the year, a company had $120,000 worth of liabilities. During the year, assets increased by $160,000 and at year-end they equaled $360,000. Liabilities decreased $20,000 during the year. Calculate the beginning and ending values of equity.

Accepted Answer

Beginning equity = $

Question 17

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Accepted Answer

A) True 
 B)False

Question 18

Flitter reported net income of $17,500 for the past year. At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities. By the end of the year, assets had increased to $300,000 and liabilities were $75,000. Calculate its return on assets:

Accepted Answer

A) 8.8% 
B) 7.0% 
C) 5.8% 
D) 35.0% 
E) 23.3% 
A) 8.8% 
B) 7.0% 
C) 5.8% 
D) 35.0% 
E) 23.3%

Question 19

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Accepted Answer

A) APB. 
B) FASB. 
C) AAA. 
D) AICPA. 
E) SEC. 
A) APB. 
B) FASB. 
C) AAA. 
D) AICPA. 
E) SEC.

Question 20

Risk is the _________________ about the return an investor expects to earn.

Accepted Answer

The answer of Risk is the _________________ about the return...

Prevor Corporation reports the following account balances at the end of its first year of operation: Prevor's total liabilities equal:

A stockholder's investment in a business normally creates an asset (cash), a liability (note payable), and stockholders' equity (investment).

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

Common stock is an increase in equity from a company's earnings activities.

A balance sheet lists:

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?

A resource that the stockholder receives from the company is called a(n):

Owner financing refers to resources contributed by creditors or lenders.

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Objectivity means that financial information is supported by independent, unbiased evidence.

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

What distinguishes liabilities from equity?

Planning involves defining an organization's ideas, goals, and actions.

Which of the following purposes would financial statements serve for external users?

At the beginning of the year, a company had $120,000 worth of liabilities. During the year, assets increased by $160,000 and at year-end they equaled $360,000. Liabilities decreased $20,000 during the year. Calculate the beginning and ending values of equity.

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Flitter reported net income of $17,500 for the past year. At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities. By the end of the year, assets had increased to $300,000 and liabilities were $75,000. Calculate its return on assets:

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Risk is the _________________ about the return an investor expects to earn.

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

Prevor Corporation reports the following account balances at the end of its first year of operation: Prevor's total liabilities equal:

A stockholder's investment in a business normally creates an asset (cash), a liability (note payable), and stockholders' equity (investment).

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

Common stock is an increase in equity from a company's earnings activities.

A balance sheet lists:

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark?

A resource that the stockholder receives from the company is called a(n):

Owner financing refers to resources contributed by creditors or lenders.

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Objectivity means that financial information is supported by independent, unbiased evidence.

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

What distinguishes liabilities from equity?

Planning involves defining an organization's ideas, goals, and actions.

Which of the following purposes would financial statements serve for external users?

At the beginning of the year, a company had $120,000 worth of liabilities. During the year, assets increased by $160,000 and at year-end they equaled $360,000. Liabilities decreased $20,000 during the year. Calculate the beginning and ending values of equity.

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Flitter reported net income of $17,500 for the past year. At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities. By the end of the year, assets had increased to $300,000 and liabilities were $75,000. Calculate its return on assets:

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Risk is the _________________ about the return an investor expects to earn.

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