Question 1

The liabilities and owner's equity of an entity are claims on the economic ____________of the entity.

Accepted Answer

resources

Question 2

Example 4.1
The following information applies to the following questions. The accountant for Big Stores has compiled the following information about the business and its accounts:
 $$\begin{array} { l r l r } 
\text { Cash } & \$ 1000 & \text { Inventory } & \$ 10000 \
\text { Revenues } & 5000 & \text { Expenses } & 3000 \
\text { Accounts Payable } & 3000 & \text { Equipment } & 15000 \
\text { Wages Payable } & 2000 & \text { Notes payable } & 12000
\end{array}$$
-Refer to Example 4.1. What is the total amount that Big Stores owes to creditors?

Accepted Answer

$\begin{array}{lr}
\text { Accounts payable } & 3000 \
\text { Wages payable } & 2000 \
\text { Notes payable } & \underline{12000}  \
\text { Total } & \underline{\underline{17000}}
\end{array}$

Question 3

A = L + OE represents the income position for a business.

Accepted Answer

A) True 
 B)False  False

Question 4

An income statement normally includes all of the following except:

Accepted Answer

A)   Revenue.
B)   Expenses.
C)   Net income.
D)   Owner's Equity.

Question 5

Describe the effect on the accounting equation of the receipt of cash from the sale of product on credit to a customer.

Accepted Answer

The answer of Describe the effect on the accounting equation...

Question 6

Which of the following best describes depreciation?

Accepted Answer

A)   Accounts for the market value of a physical asset.
B)   It is part of the cost of a physical asset allocated as an expense to each time period in which the asset is used.
C)   It shows the increase in value of a physical asset over the asset's useful life.
D)   It shows the drop in value of an asset when the asset is first used by an entity.

Question 7

A = L + OE represents the balance sheet for a business.

Accepted Answer

A) True 
 B)False

Question 8

Explain the entity concept.

Accepted Answer

The answer of Explain the entity concept....

Question 9

Creditor is a term that refers to an outside investor in the business.

Accepted Answer

A) True 
 B)False

Question 10

The three broad forms of business structure include all of the following except:

Accepted Answer

A)   Sole proprietorships
B)   Dual proprietorships
C)   Partnerships
D)   Companies / corporations

Question 11

____________________ are the costs of providing the goods or services to customers.

Accepted Answer

The answer of ____________________ are the costs of providing the...

Question 12

GAAP provides rules for entities to follow when preparing financial statements which assist external users with:

Accepted Answer

A)   Analysing owner's personal transactions.
B)   Interpreting bank statements.
C)   Making comparisons between an entity's budgeted and actual results.
D)   Making comparisons between the financial information of different entities.

Question 13

Assets are economic resources that will provide future benefits to the business.

Accepted Answer

A) True 
 B)False

Question 14

Due to the dual effect of transactions, a business must make at least______________________ changes in its assets, liabilities and/or owners' equity when it records each transaction.

Accepted Answer

The answer of Due to the dual effect of transactions,...

Question 15

The monetary total of a business' resources must equal the sum of the claims on resources by creditors and residual claimants.

Accepted Answer

A) True 
 B)False

Question 16

Provide a brief explanation of owner's equity.

Accepted Answer

The answer of Provide a brief explanation of owner's equity....

Question 17

Because of the dual effect of transactions, every transaction will change both sides of the accounting equation.

Accepted Answer

A) True 
 B)False

Question 18

Each business is an entity and has its own accounting ____________________ and accounting records.

Accepted Answer

The answer of Each business is an entity and has...

Question 19

_________________________ are the amounts owed to the business by customers.

Accepted Answer

The answer of _________________________ are the amounts owed to the...

Question 20

An ____________________ is considered to be separate from its owners and from any other business.

Accepted Answer

The answer of An ____________________ is considered to be separate...

Exam 4: The Accounting System: Concepts and Applications

The liabilities and owner's equity of an entity are claims on the economic ____________of the entity.

A = L + OE represents the income position for a business.

An income statement normally includes all of the following except:

Describe the effect on the accounting equation of the receipt of cash from the sale of product on credit to a customer.

Which of the following best describes depreciation?

A = L + OE represents the balance sheet for a business.

Explain the entity concept.

Creditor is a term that refers to an outside investor in the business.

The three broad forms of business structure include all of the following except:

____________________ are the costs of providing the goods or services to customers.

GAAP provides rules for entities to follow when preparing financial statements which assist external users with:

Assets are economic resources that will provide future benefits to the business.

Due to the dual effect of transactions, a business must make at least______________________ changes in its assets, liabilities and/or owners' equity when it records each transaction.

The monetary total of a business' resources must equal the sum of the claims on resources by creditors and residual claimants.

Provide a brief explanation of owner's equity.

Because of the dual effect of transactions, every transaction will change both sides of the accounting equation.

Each business is an entity and has its own accounting ____________________ and accounting records.

_________________________ are the amounts owed to the business by customers.

An ____________________ is considered to be separate from its owners and from any other business.