Question 1

Stockholders' equity is composed of paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False  True

Question 2

An examination or in-depth inspection of a firm's financial statement and records

Accepted Answer

Audit

Question 3

The following information was extracted from the accounting records of Ernest Company: $$\begin{array} { l r } 
\text { Beginning Paid-In Capital } & \$ 90,000 \
\text { Beginning Retained Earnings } & \$ 210,000 \
\text { Beginning Assets } & \$ 455,000
\end{array}$$ During the period assets increased by $150,000, revenues were $200,000, and expenses were $165,000.The owners made no additional investments. The amount of Ernest Company's liabilities at the beginning of the period is _____.

Accepted Answer

A)  $545,000
B)  $155,000
C)  $300,000
D)  $245,000  B

Question 4

_____ would result in an increase in net income under the accrual basis, but not an increase in net income under the cash basis.

Accepted Answer

A)  The sale of inventory on account at a sales price in excess of cost
B)  Cash collection from a credit customer
C)  The cash sale of inventory at a sales price in excess of cost
D)  The expiration of prepaid rent

Question 5

The balance sheet shows a company at only one point in time.

Accepted Answer

A) True 
 B)False

Question 6

For a corporation, the excess of the assets over the liabilities is called _____.

Accepted Answer

A)  retained earnings
B)  paid-in capital
C)  common stock
D)  owners' equity

Question 7

A multi-step income statement_____.

Accepted Answer

A)  includes information about retained earnings
B)  is prepared only by corporations
C)  includes a subtotal for gains and losses
D)  includes a subtotal for gross profit

Question 8

Examples of accrued expenses include property taxes and interest on borrowed money.

Accepted Answer

A) True 
 B)False

Question 9

The ownership claim arising from funds contributed by the owners of the business is called _____.

Accepted Answer

A)  liabilities
B)  paid-in capital
C)  retained earnings
D)  stockholders' equity

Question 10

Nicklaus Company sold inventory costing $1,000 for $1,400 on account.If Nicklaus Company operates under the accrual basis, what effect will the transaction have on the liabilities and owners' equity side of the balance sheet?

Accepted Answer

A)  There will be no effect since the customer to whom the inventory was sold has not yet paid.
B)  There will be no effect since the sales and/or cost of goods sold are income statement accounts.
C)  Owners' equity will decrease by $1,000.
D)  Owners' equity will increase by $400.

Question 11

Land is depreciated using a very long estimated useful life.

Accepted Answer

A) True 
 B)False

Question 12

A snapshot of the financial status of an organization at an instant of time

Accepted Answer

The answer of A snapshot of the financial status of...

Question 13

Accrue means to pay off a payable.

Accepted Answer

A) True 
 B)False

Question 14

Rent paid in advance would be regarded as a prepaid expense by the renter and as unearned revenue by the building owner.

Accepted Answer

A) True 
 B)False

Question 15

_____ is are) economic resources that are expected to benefit future activities.

Accepted Answer

A)  Stockholders' equity
B)  Liabilities
C)  Assets
D)  Retained earnings

Question 16

The group that establishes global GAAP

Accepted Answer

The answer of The group that establishes global GAAP...

Question 17

Scorpion Company pays wages of $400 per day.The workweek begins on Monday and ends on Friday.Wages are paid weekly every Friday.The current month ends on a Wednesday.The adjusting entry for wages will _____.

Accepted Answer

A)  increase expenses by $400
B)  increase expenses by $1,200
C)  increase expenses by $2,000
D)  have no effect on expenses

Question 18

The stockholders' equity section of a corporation's balance sheet can be divided into_____.

Accepted Answer

A)  net income and retained earnings
B)  retained earnings and paid-in capital
C)  net income, retained earnings, and paid-in capital
D)  paid-in capital and net income

Question 19

The cash basis of accounting recognizes the impact of transactions in the period when _____.

Accepted Answer

A)  revenues and expenses occur
B)  cash is received or disbursed
C)  the transaction occurs
D)  the accounting equation increases

Question 20

The _____ has ultimate responsibility for specifying generally accepted accounting principles for publicly traded companies in the United States.

Accepted Answer

A)  FASB
B)  IASC
C)  SEC
D)  GAAP

Exam 15: Basic Accounting: Concepts, Techniques, and Conventions

Stockholders' equity is composed of paid-in capital and retained earnings.

An examination or in-depth inspection of a firm's financial statement and records

_____ would result in an increase in net income under the accrual basis, but not an increase in net income under the cash basis.

The balance sheet shows a company at only one point in time.

For a corporation, the excess of the assets over the liabilities is called _____.

A multi-step income statement_____.

Examples of accrued expenses include property taxes and interest on borrowed money.

The ownership claim arising from funds contributed by the owners of the business is called _____.

Nicklaus Company sold inventory costing $1,000 for $1,400 on account.If Nicklaus Company operates under the accrual basis, what effect will the transaction have on the liabilities and owners' equity side of the balance sheet?

Land is depreciated using a very long estimated useful life.

A snapshot of the financial status of an organization at an instant of time

Accrue means to pay off a payable.

Rent paid in advance would be regarded as a prepaid expense by the renter and as unearned revenue by the building owner.

_____ is are) economic resources that are expected to benefit future activities.

The group that establishes global GAAP

Scorpion Company pays wages of $400 per day.The workweek begins on Monday and ends on Friday.Wages are paid weekly every Friday.The current month ends on a Wednesday.The adjusting entry for wages will _____.

The stockholders' equity section of a corporation's balance sheet can be divided into_____.

The cash basis of accounting recognizes the impact of transactions in the period when _____.

The _____ has ultimate responsibility for specifying generally accepted accounting principles for publicly traded companies in the United States.