Question 1

The proprietorship form of business organization

Accepted Answer

A)  must have at least three owners in most states.
B)  requires that the owner be personally liable for all debts of the business.
C)  combines the records of the business with the personal records of the owner.
D)  is characterized by a legal distinction between the business as an economic unit and the owner. B

Question 2

Internal users of accounting information include all of following except the

Accepted Answer

A)  CEO of Sony.
B)  Human Resources department at Hyundai.
C)  Marketing department at Braun.
D)  Shareholders of Airbus. D

Question 3

As of June 30, 2011, Dallas Company has assets of $120,000 and equity of $10,000.What are the liabilities for Dallas Company as of June 30, 2011?

Accepted Answer

A)  $130,000
B)  $100,000
C)  $110,000
D)  $120,000 C

Question 4

A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the

Accepted Answer

A)  stand alone concept.
B)  monetary unit assumption.
C)  corporate form of ownership.
D)  economic entity assumption.

Question 5

Use the following information for questions O' Hara Company began operations on December 1,2011 . Presented below is selected information related to O' Hara Company at December 31, $ 2011 . $

-Net income for the month of December is

Accepted Answer

A)  £27,000
B)  £42,000
C)  £56,000
D)  £66,000

Question 6

If the retained earnings account increases from the beginning of the year to the end of the year, then

Accepted Answer

A)  net income is less than dividends.
B)  a net loss is less than dividends.
C)  the company must have sold stock.
D)  net income is greater than dividends.

Question 7

If total liabilities increased by ¥21,000 during a period of time and equity decreased by ¥9,000 during the same period, then the amount and direction of the period's change in total assets is a(n)

Accepted Answer

A)  ¥21,000 increase.
B)  ¥30,000 increase.
C)  ¥12,000 decrease.
D)  ¥12,000 increase.

Question 8

Which of the following is not an advantage of the corporate form of business organization?

Accepted Answer

A)  Limited liability of shareholders
B)  Transferability of ownership
C)  Unlimited personal liability for shareholders
D)  Unlimited life

Question 9

An investment of cash by an owner of a business increases assets and

Accepted Answer

A)  increases liabilities.
B)  increases equity.
C)  decreases equity.
D)  decreases liabilities.

Question 10

During January, Bruni Corporation earned revenue of €45,000, incurred expenses of €22,000, and paid dividends of €3,000.The income statement will report net income for the month of

Accepted Answer

A)  €20,000
B)  €23,000
C)  €26,000
D)  €45,000

Question 11

All of the following are services offered by public accountants except

Accepted Answer

A)  budgeting.
B)  auditing.
C)  tax planning.
D)  consulting.

Question 12

Hyundai inc.purchased land for W122,000,000 in 2002.At December 31,2011, an appraisal determined the fair value of the land is W136,000,0000.If Hyundai follows the cost principle, the land will be reported on the statement of financial position at

Accepted Answer

A)  W108,000,000.
B)  W122,000,000.
C)  W136,000,000.
D)  W150,000,000.

Question 13

Transactions that can be measured in dollars and cents are recorded in the financial information system.

Accepted Answer

A) True 
 B)False

Question 14

During June, Sing Tao Inc.sold ordinary shares for HK$11,450,000, earned revenue of HK$2,020,000, incurred expenses of HK$1,030,000, and paid dividends of HK$30,000.Net income for June is

Accepted Answer

A)  HK$990,000
B)  HK$993,000
C)  HK$12,410,000
D)  HK$13,470,000

Question 15

The hiring of a new company president is an economic event recorded by the financial information system.

Accepted Answer

A) True 
 B)False

Question 16

At October 1, Smithson Enterprises reported equity of $70,000.During October, no capital shares were issued and the company posted a net loss of $6,000.If equity at October 31 totals $64,000, what amount of dividends were made during the month?

Accepted Answer

A)  $0
B)  $2,000
C)  $6,000
D)  $21,000

Question 17

As of December 31, 2011, Deitrich Inc.had assets of €8,700,000, liabilities of €3,100,000, share capital of ₤2,200,000 and retained earnings of €3,400,000.Total equity as of that date are

Accepted Answer

A)  €2,200,000.
B)  €2,500,000.
C)  €5,600,000.
D)  €8,700,000.

Question 18

IFRS follows one measurement principle knows as the cost principle.

Accepted Answer

A) True 
 B)False

Question 19

In the retained earnings statement, revenues are listed first, followed by expenses, and net income (or net loss).

Accepted Answer

A) True 
 B)False

Question 20

Share capital is the total amount paid in by shareholders for shares purchased.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Action

The proprietorship form of business organization

Internal users of accounting information include all of following except the

As of June 30, 2011, Dallas Company has assets of $120,000 and equity of $10,000.What are the liabilities for Dallas Company as of June 30, 2011?

A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the

Use the following information for questions O' Hara Company began operations on December 1,2011 . Presented below is selected information related to O' Hara Company at December 31, $2011 .$ -Net income for the month of December is

If the retained earnings account increases from the beginning of the year to the end of the year, then

If total liabilities increased by ¥21,000 during a period of time and equity decreased by ¥9,000 during the same period, then the amount and direction of the period's change in total assets is a(n)

Which of the following is not an advantage of the corporate form of business organization?

An investment of cash by an owner of a business increases assets and

During January, Bruni Corporation earned revenue of €45,000, incurred expenses of €22,000, and paid dividends of €3,000.The income statement will report net income for the month of

All of the following are services offered by public accountants except

Hyundai inc.purchased land for W122,000,000 in 2002.At December 31,2011, an appraisal determined the fair value of the land is W136,000,0000.If Hyundai follows the cost principle, the land will be reported on the statement of financial position at

Transactions that can be measured in dollars and cents are recorded in the financial information system.

During June, Sing Tao Inc.sold ordinary shares for HK$11,450,000, earned revenue of HK$2,020,000, incurred expenses of HK$1,030,000, and paid dividends of HK$30,000.Net income for June is

The hiring of a new company president is an economic event recorded by the financial information system.

At October 1, Smithson Enterprises reported equity of $70,000.During October, no capital shares were issued and the company posted a net loss of $6,000.If equity at October 31 totals $64,000, what amount of dividends were made during the month?

As of December 31, 2011, Deitrich Inc.had assets of €8,700,000, liabilities of €3,100,000, share capital of ₤2,200,000 and retained earnings of €3,400,000.Total equity as of that date are

IFRS follows one measurement principle knows as the cost principle.

In the retained earnings statement, revenues are listed first, followed by expenses, and net income (or net loss).

Share capital is the total amount paid in by shareholders for shares purchased.

Exam 1: Accounting in Action

The proprietorship form of business organization

Internal users of accounting information include all of following except the

As of June 30, 2011, Dallas Company has assets of $120,000 and equity of $10,000.What are the liabilities for Dallas Company as of June 30, 2011?

A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the

Use the following information for questions O' Hara Company began operations on December 1,2011 . Presented below is selected information related to O' Hara Company at December 31, 2011. 2011 . 2011. -Net income for the month of December is

If the retained earnings account increases from the beginning of the year to the end of the year, then

If total liabilities increased by ¥21,000 during a period of time and equity decreased by ¥9,000 during the same period, then the amount and direction of the period's change in total assets is a(n)

Which of the following is not an advantage of the corporate form of business organization?

An investment of cash by an owner of a business increases assets and

During January, Bruni Corporation earned revenue of €45,000, incurred expenses of €22,000, and paid dividends of €3,000.The income statement will report net income for the month of

All of the following are services offered by public accountants except

Hyundai inc.purchased land for W122,000,000 in 2002.At December 31,2011, an appraisal determined the fair value of the land is W136,000,0000.If Hyundai follows the cost principle, the land will be reported on the statement of financial position at

Transactions that can be measured in dollars and cents are recorded in the financial information system.

During June, Sing Tao Inc.sold ordinary shares for HK$11,450,000, earned revenue of HK$2,020,000, incurred expenses of HK$1,030,000, and paid dividends of HK$30,000.Net income for June is

The hiring of a new company president is an economic event recorded by the financial information system.

At October 1, Smithson Enterprises reported equity of $70,000.During October, no capital shares were issued and the company posted a net loss of $6,000.If equity at October 31 totals $64,000, what amount of dividends were made during the month?

As of December 31, 2011, Deitrich Inc.had assets of €8,700,000, liabilities of €3,100,000, share capital of ₤2,200,000 and retained earnings of €3,400,000.Total equity as of that date are

IFRS follows one measurement principle knows as the cost principle.

In the retained earnings statement, revenues are listed first, followed by expenses, and net income (or net loss).

Share capital is the total amount paid in by shareholders for shares purchased.

Use the following information for questions O' Hara Company began operations on December 1,2011 . Presented below is selected information related to O' Hara Company at December 31, $2011 .$ -Net income for the month of December is