Question 1

Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

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 2

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 3

Opportunities in accounting include auditing, consulting, market research, and tax planning.

Accepted Answer

A) True 
 B)False

Question 4

Marian Mosely is the owner of Mosely Accounting Services. Which accounting principle requires Marian to keep her personal financial information separate from the financial information of Mosely Accounting Services?

Accepted Answer

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

Question 5

Della's Donuts owner made investments of $50,000 and withdrawals of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income.

Accepted Answer

A)  $30,000. 
B)  $83,000. 
C)  $64,000. 
D)  $19,000. 
E)  $49,000. 
A)  $30,000. 
B)  $83,000. 
C)  $64,000. 
D)  $19,000. 
E)  $49,000.

Question 6

The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Understanding generally accepted accounting principles is not necessary to use and interpret financial statements.

Accepted Answer

A) True 
 B)False

Question 9

Describe the three types of activities reported on the statement of cash flows.

Accepted Answer

The three types of activities reported i

Question 10

Social responsibility:

Accepted Answer

A)  Is a concern for the impact of our actions on society. 
B)  Is a code that helps in dealing with confidential information. 
C)  Is required by the SEC. 
D)  Requires that all businesses conduct social audits. 
E)  Is limited to large companies. 
A)  Is a concern for the impact of our actions on society. 
B)  Is a code that helps in dealing with confidential information. 
C)  Is required by the SEC. 
D)  Requires that all businesses conduct social audits. 
E)  Is limited to large companies.

Question 11

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

Accepted Answer

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

Question 12

An example of an operating activity is:

Accepted Answer

A)  Paying wages. 
B)  Purchasing office equipment. 
C)  Borrowing money from a bank. 
D)  Selling stock. 
E)  Paying off a loan. 
A)  Paying wages. 
B)  Purchasing office equipment. 
C)  Borrowing money from a bank. 
D)  Selling stock. 
E)  Paying off a loan.

Question 13

Owner's investments are increases in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 14

A partnership:

Accepted Answer

A)  Is also called a sole proprietorship. 
B)  Has unlimited liability for its partners. 
C)  Has to have a written agreement in order to be legal. 
D)  Is a legal organization separate from its owners. 
E)  Has owners called shareholders. 
A)  Is also called a sole proprietorship. 
B)  Has unlimited liability for its partners. 
C)  Has to have a written agreement in order to be legal. 
D)  Is a legal organization separate from its owners. 
E)  Has owners called shareholders.

Question 15

The business entity principle means that a business will continue operating for an indefinite period of time.

Accepted Answer

A) True 
 B)False

Question 16

If equity is $300,000 and liabilities are $192,000, then assets equal:

Accepted Answer

A)  $108,000. 
B)  $192,000. 
C)  $300,000. 
D)  $492,000. 
E)  $792,000. 
A)  $108,000. 
B)  $192,000. 
C)  $300,000. 
D)  $492,000. 
E)  $792,000.

Question 17

Zion 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 18

The accounting equation can be restated as: Assets - Equity = Liabilities.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:

Accepted Answer

A)  $40,500 increase. 
B)  $40,500 decrease. 
C)  $134,500 decrease. 
D)  $134,000 increase. 
E)  $9,500 increasE.$62,500 - $47,000 + $25,000 = $40,500 increase 
A)  $40,500 increase. 
B)  $40,500 decrease. 
C)  $134,500 decrease. 
D)  $134,000 increase. 
E)  $9,500 increasE.$62,500 - $47,000 + $25,000 = $40,500 increase

Exam 1: Accounting in Business

Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Opportunities in accounting include auditing, consulting, market research, and tax planning.

Marian Mosely is the owner of Mosely Accounting Services. Which accounting principle requires Marian to keep her personal financial information separate from the financial information of Mosely Accounting Services?

Della's Donuts owner made investments of $50,000 and withdrawals of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income.

The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

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

Understanding generally accepted accounting principles is not necessary to use and interpret financial statements.

Describe the three types of activities reported on the statement of cash flows.

Social responsibility:

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

An example of an operating activity is:

Owner's investments are increases in equity from a company's earnings activities.

A partnership:

The business entity principle means that a business will continue operating for an indefinite period of time.

If equity is $300,000 and liabilities are $192,000, then assets equal:

Zion 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?

The accounting equation can be restated as: Assets - Equity = Liabilities.

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

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:

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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