Exam 1: Accounting in Business

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:

_________ are beliefs that separate right from wrong.

Ethical behavior requires:

A common characteristic of __________ is their ability to provide expected future benefits to a business.

Explain the accounting equation, and define its terms.

Data for Madison Realty are as follows: The owner, Mary Madison, withdrew a total of $30,000 for personal use during the year. Using the above data, prepare Madison Realty's Statement of Owner's Equity for the year ended December 31.

Identify the risk and the return in each of the following examples. a. Investing $500 in a CD at 4.5% interest. b. Placing a $100 bet on an NBA game. c. Investing $10,000 in Microsoft stock. d. Borrowing $20,000 in student loans.

________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

The statement of owner's equity:

The three major types of business activities are operating, financing, and investing.

As a general rule, revenues should not be recognized in the accounting records until it is received in cash.

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

The International Accounting Standards board (IASB) has the authority to impose its standards on companies around the world.

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

The Securities and Exchange Commission (SEC) is a government agency that has legal authority to establish GAAP.

If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity?

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

The ____________________ describes a company's revenues and expenses over a period of time due to earnings activities.

Cool Tours had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

A company's balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of owner's equity?