Question 1

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

Accepted Answer

The going-concern principle means that f

Question 2

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

The answer of For each of the following transactions, identify...

Question 3

The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that the building was easily worth $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Maxim 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 4

Risk is the uncertainty about the return we expect to earn.

Accepted Answer

A) True 
 B)False

Question 5

Revenues are increases in equity from a company's earning activities.

Accepted Answer

A) True 
 B)False

Question 6

A corporation:

Accepted Answer

A)  Is a business legally separate from its owners. 
B)  Is controlled by the FASB. 
C)  Has shareholders who have unlimited liability for the acts of the corporation. 
D)  Is the same as a limited liability partnership. 
E)  Is not subject to double taxation. 
A)  Is a business legally separate from its owners. 
B)  Is controlled by the FASB. 
C)  Has shareholders who have unlimited liability for the acts of the corporation. 
D)  Is the same as a limited liability partnership. 
E)  Is not subject to double taxation.

Question 7

Arrow's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%.

Accepted Answer

A) True 
 B)False

Question 8

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 9

The excess of expenses over revenues for a period is:

Accepted Answer

A)  Net assets. 
B)  Equity. 
C)  Net loss. 
D)  Net income. 
E)  A liability. 
A)  Net assets. 
B)  Equity. 
C)  Net loss. 
D)  Net income. 
E)  A liability.

Question 10

Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

Accepted Answer

A) True 
 B)False

Question 11

The records of Skymaster Airplane Rentals show the following information as of December 31. Skymaster withdrew $52,000 during the year for personal expenses. Prepare a December income statement, a December statement of owner's equity, and a December 30 balance sheet.

Accepted Answer

The answer of The records of Skymaster Airplane Rentals show...

Question 12

The income statement reports on operating activities at a point in time.

Accepted Answer

A) True 
 B)False

Question 13

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 14

______________________ is the recording of financial transactions and events, either manually or electronically.

Accepted Answer

Recordkeep

Question 15

U. S. government bonds are:

Accepted Answer

A)  High-risk and high-return investments. 
B)  Low-risk and low-return investments. 
C)  High-risk and low-return investments. 
D)  Low-risk and high-return investments. 
E)  High risk and no-return investments. 
A)  High-risk and high-return investments. 
B)  Low-risk and low-return investments. 
C)  High-risk and low-return investments. 
D)  Low-risk and high-return investments. 
E)  High risk and no-return investments.

Question 16

Revenue is properly recognized:

Accepted Answer

A)  When the customer's order is received. 
B)  Only if the transaction creates an account receivable. 
C)  At the end of the accounting period. 
D)  Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price. 
E)  When cash from a sale is received. 
A)  When the customer's order is received. 
B)  Only if the transaction creates an account receivable. 
C)  At the end of the accounting period. 
D)  Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price. 
E)  When cash from a sale is received.

Question 17

A disadvantage of a sole proprietorship is the fact that the owner has __________________.

Accepted Answer

The answer of A disadvantage of a sole proprietorship is...

Question 18

What is the purpose of return on assets as an analytical tool?

Accepted Answer

Return on assets is useful in

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

________________________________ reports changes in the owner's claim on the business's assets over a period of time.

Accepted Answer

The statem

Exam 1: Accounting in Business

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

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.

The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that the building was easily worth $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Maxim to record the building on its records at $500,000?

Risk is the uncertainty about the return we expect to earn.

Revenues are increases in equity from a company's earning activities.

A corporation:

Arrow's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%.

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

The excess of expenses over revenues for a period is:

Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

The records of Skymaster Airplane Rentals show the following information as of December 31. Skymaster withdrew $52,000 during the year for personal expenses. Prepare a December income statement, a December statement of owner's equity, and a December 30 balance sheet.

The income statement reports on operating activities at a point in time.

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

______________________ is the recording of financial transactions and events, either manually or electronically.

U. S. government bonds are:

Revenue is properly recognized:

A disadvantage of a sole proprietorship is the fact that the owner has __________________.

What is the purpose of return on assets as an analytical tool?

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

________________________________ reports changes in the owner's claim on the business's assets over a period of time.

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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