Question 1

Match between columns
                        Premises: Wages exjeerse
accounts receivable
withdrawal
capital
land
accounts payable

Accepted Answer

The Answer of liability and owner's equity and asset is...

Question 2

Countries outside the U.S. use financial accounting standards issued by the:

Accepted Answer

A)  AICPA 
B)  SEC 
C)  IASB 
D)  FASB

Question 3

An account receivable is a claim against a customer arising from a sale on account.

Accepted Answer

A) True 
 B)False

Question 4

Discuss the characteristics of a LLC (Limited liability company).

Accepted Answer

The answer of Discuss the characteristics of a LLC (Limited...

Question 5

Which of the following is not a role of accounting in business?

Accepted Answer

A)  To provide reports to users about the economic activities and conditions of a business. 
B)  To personally guarantee loans of the business. 
C)  To provide information to other users to determine the economic performance and condition of the business. 
D)  To assess the various informational needs of users and design its accounting system to meet those needs.

Question 6

Name and describe the four primary financial statements for a proprietorship.

Accepted Answer

The answer of Name and describe the four primary financial...

Question 7

The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.

Accepted Answer

A) True 
 B)False

Question 8

Select the type of business that is most likely to obtain large amounts of resources by issuing stock.

Accepted Answer

A)  Partnership 
B)  Corporation 
C)  Proprietorship 
D)  None are correct.

Question 9

Allen Marks is the sole owner and operator of Great Marks Company. As of the end of its accounting period, December 31, 2013, Great Marks Company has assets of $940,000 and liabilities of $300,000. During 2014, Allen Marks invested an additional $73,000 and withdrew $33,000 from the business. What is the amount of net income during 2014, assuming that as of December 31, 2014, assets were $995,000, and liabilities were $270,000?

Accepted Answer

A)  $ 45,000 
B)  $ 50,000 
C)  $106,000 
D)  $370,000

Question 10

From the following list of accounts taken from Lamar's accounting records, identify those that would appear on the Income Statement.
 $\begin{array}{ll}
\text { (a) } & \text { Rent Expense } \
\text { (b) } & \text { Land } \
\text { (c) } & \text { Capital } \
\text { (d) } & \text { Fees Earned } \
\text { (e) } & \text { Withdrwal } \
\text { (f) } & \text { Wages Expense } \
\text { (g) } & \text { Investment }
\end{array}$

Accepted Answer

The answer of From the following list of accounts taken...

Question 11

For accounting purposes, the business entity should be considered separate from its owners if the entity is

Accepted Answer

A)  a corporation 
B)  a proprietorship 
C)  a partnership 
D)  all of the above

Question 12

Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management.

Accepted Answer

A) True 
 B)False

Question 13

Kim Hsu is the owner of Hsu's Financial Services. At the end of its accounting period, December 31, 2011, Hsu's has assets of $575,000 and owner's equity of $335,000. Using the accounting equation and considering each case independently, determine the following amounts.
a. Hsu's liabilities as of December 31, 2011.
b. Hsu's liabilities as of December 31, 2012, assuming that assets increased by $56,000 and owner's equity decreased by $32,000.
c. Net income or net loss during 2012, assuming that as of December 31, 2012, assets were $592,000, liabilities were $450,000, and there were no additional investments or withdrawals.

Accepted Answer

The answer of Kim Hsu is the owner of Hsu's...

Question 14

What is the major difference between the objective of financial accounting and the objective of managerial accounting?

Accepted Answer

The answer of What is the major difference between the...

Question 15

Cash withdrawals by owners decrease assets and increase equity.

Accepted Answer

A) True 
 B)False

Question 16

All of the following statements regarding the ratio of liabilities to owner's equity are true except:

Accepted Answer

A)  A ratio of 1 indicates that liabilities equal owner's equity. 
B)  Corporations can use this ratio but substitute total stockholders' equity for total owner's equity. 
C)  The higher this ratio is, the better able a business is to withstand poor business conditions and pay creditors. 
D)  The lower this ratio is, the better able a business is to withstand poor business conditions and pay creditors.

Question 17

Owner's withdrawals

Accepted Answer

A)  increase expenses 
B)  decrease expenses 
C)  increase cash 
D)  decrease owner's equity

Question 18

Managerial accounting information is used by external and internal users equally.

Accepted Answer

A) True 
 B)False

Question 19

Bob Johnson is the sole owner of Johnson's Carpet Cleaning Service. Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity concept.

Accepted Answer

The answer of Bob Johnson is the sole owner of...

Question 20

An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a

Accepted Answer

A)  proprietorship 
B)  corporation 
C)  partnership 
D)  governmental unit

Exam 1: Introduction to Accounting and Business

select whether each of the following represents an asset, liability, or owner's equity:

Countries outside the U.S. use financial accounting standards issued by the:

An account receivable is a claim against a customer arising from a sale on account.

Discuss the characteristics of a LLC (Limited liability company).

Which of the following is not a role of accounting in business?

Name and describe the four primary financial statements for a proprietorship.

The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.

Select the type of business that is most likely to obtain large amounts of resources by issuing stock.

For accounting purposes, the business entity should be considered separate from its owners if the entity is

Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management.

What is the major difference between the objective of financial accounting and the objective of managerial accounting?

Cash withdrawals by owners decrease assets and increase equity.

All of the following statements regarding the ratio of liabilities to owner's equity are true except:

Owner's withdrawals

Managerial accounting information is used by external and internal users equally.

Bob Johnson is the sole owner of Johnson's Carpet Cleaning Service. Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity concept.

An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a