Question 1

The internal operating functions of businesses include research and development, distribution and human resources.

Accepted Answer

A) True 
 B)False

Question 2

The income statement reports all of the following except:

Accepted Answer

A)  Revenues earned by a business 
B)  Expenses incurred by a business 
C)  Assets owned by a business 
D)  Net income or loss earned by a business 
E)  The time period over which the earnings occurred

Question 3

Expenses decrease retained earnings and are the costs acquired to earn revenues.

Accepted Answer

A) True 
 B)False

Question 4

Chuck Taylor invested $175,000 in cash in Fast-Forward. This amount would be reported in the statement of cash flows under financing activities.

Accepted Answer

A) True 
 B)False

Question 5

Accounting is a ______________________ that identifies, records and communicates relevant, reliable and comparable information about an organization's economic activities.

Accepted Answer

The answer of Accounting is a ______________________ that identifies, records...

Question 6

Operating activities include long-term borrowing and repaying cash from lenders and cash investments by owners or dividends to the owner.

Accepted Answer

A) True 
 B)False

Question 7

Prepare a December 31 balance sheet in proper form for Surety Insurance from the following items and amounts:

Accepted Answer

The answer of Prepare a December 31 balance sheet in...

Question 8

__________________________ is the recording of transactions or events and is just one part of accounting.

Accepted Answer

The answer of __________________________ is the recording of transactions or...

Question 9

A company borrows $125,000 from the Eastside Bank and receives the loan proceeds in cash. This represents a(n):

Accepted Answer

A)  Revenue activity 
B)  Operating activity 
C)  Expense activity 
D)  Investing activity 
E)  Financing activity

Question 10

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Accepted Answer

A) True 
 B)False

Question 11

If Beginning Retained Earnings was $184,300, the company distributed $46,000 in dividends and Ending Retained Earnings was $345,000, what was the net income for the period?

Accepted Answer

A)  $154,700 
B)  $206,700 
C)  $114,700 
D)  $575,300 
E)  $160,700

Question 12

Describe the three types of activities reported on the statement of cash flows.

Accepted Answer

The answer of Describe the three types of activities reported...

Question 13

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

Accepted Answer

The answer of Identify the risk and the return in...

Question 14

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the amount of cash or cash-equivalent given in exchange is the:

Accepted Answer

A)  Accounting equation 
B)  Cost principle 
C)  Going-concern principle 
D)  Realization principle 
E)  Business entity principle

Question 15

The financing functions of a business include:

Accepted Answer

A)  Research and development 
B)  Purchasing 
C)  Marketing 
D)  Distribution 
E)  Selling common stock

Question 16

Fast-Forward has net income of $18,955 and assets at the beginning of the year of $200,000. Its assets at the end of the year total $246,000. Compute its return on assets.

Accepted Answer

A)  7.7% 
B)  8.5% 
C)  9.5% 
D)  11.8% 
E)  13.0%

Question 17

The financial statement that reports whether the business earned a profit and also lists the types and amounts of the revenues and expenses is called a(n):

Accepted Answer

A)  Balance sheet 
B)  Statement of retained earnings 
C)  Statement of cash flows 
D)  Income statement 
E)  Statement of financial position

Question 18

An Asset is:

Accepted Answer

A)  only acquired with cash 
B)  something the company owns 
C)  only contributed by stockholders 
D)  a company's obligation to pay 
E)  is also called contributed capital

Question 19

Beginning Assets were $437,600, Beginning Liabilities were $262,560, Common Stock sold during the year totaled $45,000, Revenue for the year was $414,250, Expenses for the year were $280,000, Dividends declared was $22,700, and Ending Liabilities is $$350,000. What are the Ending Assets for the year?

Accepted Answer

A)  $,700,160 
B)  $,612,560 
C)  $,787,600 
D)  $,681,590 
E)  $1,159,410

Question 20

Which of the following statements is true of external information users?

Accepted Answer

A)  They are directly involved in managing the organization 
B)  Their needs are met by the managerial area of accounting 
C)  They have limited access to an organization's accounting information 
D)  They use accounting information to help improve the efficiency and effectiveness of an organization 
E)  They are the only users of accounting information who rely on internal controls to monitor company activities

Exam 1: Introducing Accounting in Business

The internal operating functions of businesses include research and development, distribution and human resources.

The income statement reports all of the following except:

Expenses decrease retained earnings and are the costs acquired to earn revenues.

Chuck Taylor invested $175,000 in cash in Fast-Forward. This amount would be reported in the statement of cash flows under financing activities.

Accounting is a ______________________ that identifies, records and communicates relevant, reliable and comparable information about an organization's economic activities.

Operating activities include long-term borrowing and repaying cash from lenders and cash investments by owners or dividends to the owner.

Prepare a December 31 balance sheet in proper form for Surety Insurance from the following items and amounts:

__________________________ is the recording of transactions or events and is just one part of accounting.

A company borrows $125,000 from the Eastside Bank and receives the loan proceeds in cash. This represents a(n) :

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

If Beginning Retained Earnings was $184,300, the company distributed $46,000 in dividends and Ending Retained Earnings was $345,000, what was the net income for the period?

Describe the three types of activities reported on the statement of cash flows.

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

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the amount of cash or cash-equivalent given in exchange is the:

The financing functions of a business include:

Fast-Forward has net income of $18,955 and assets at the beginning of the year of $200,000. Its assets at the end of the year total $246,000. Compute its return on assets.

The financial statement that reports whether the business earned a profit and also lists the types and amounts of the revenues and expenses is called a(n) :

An Asset is:

Which of the following statements is true of external information users?