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Exam 1: Accounting in Business

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Question 91

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Explain why ethics are an integral part of accounting.

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The purpose of accounting is to provide ...

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Question 92

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Every business transaction leaves the accounting equation in balance.

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Question 93

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The Sarbanes-Oxley Act (SOX)requires documentation and verification of internal controls.It also emphasizes effective internal controls.

The description of the relation between a company's assets,liabilities,and equity,which is expressed as Assets = Liabilities + Equity,is known as the:

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of stockholders' equity as of August 31 of the current year?

Billington Corp borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

Technology:

A parcel of land is offered for sale at $600,000,is assessed for tax purposes at $500,000,is recognized by its purchasers as easily being worth $575,000,and is sold for $570,000.At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

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

How does the going-concern principle affect reporting asset values of a business?

Owners of a corporation are called shareholders or stockholders.

Jet Styling has the following beginning cash balance and cash transactions for the month of January.Using this information prepare a statement of cash flows.

At the end of its first year of operations,the records of Roadmaster Auto Rentals show the following information.$52,000 of cash dividends were paid during the year.Prepare a December income statement,a December statement of retained earnings,and a December 30 balance sheet.

Risk is the ________ about the return an investor expects to earn.

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

From an accounting perspective,an event is a happening that affects the accounting equation,but cannot be measured.

Describe the two important guidelines for revenue recognition.

The statement of cash flows reports all of the following except:

At the beginning of the period,a company had $350,000 worth of assets,$110,000 worth of liabilities,and $240,000 worth of equity.Assume the only change during the period was a $30,000 purchase of equipment by issuing a note payable.Show the accounting equation with the appropriate amounts at the end of the period.

Assets created by selling goods and services on credit are: