Question 1

Planning activities are the means an organization uses to pay for resources like land, buildings, and equipment to carry out its plans.

Accepted Answer

A) True 
 B)False

Question 2

Technology

Accepted Answer

A)   Has replaced accounting.
B)   Has not changed the work that accountants do.
C)   Has closely linked accounting with consulting, planning, and other financial services.
D)   In accounting has replaced the need for decision makers.
E)   In accounting is only available to large corporations.F) A) and B)
G) B) and C)

Question 3

The basic financial statements include all of the following except:

Accepted Answer

A)   Balance Sheet.
B)   Income Statement.
C)   Statement of Owner's Equity.
D)   Statement of Cash Flows.
E)   Trial Balance.F) All of the above
G) None of the above

Question 4

Return on assets is often stated in ratio form as the amount of average total assets divided by income.

Accepted Answer

A) True 
 B)False

Question 5

A limited partnership:

Accepted Answer

A)   Includes a general partner with unlimited liability.
B)   Is subject to double taxation.
C)   Has owners called stockholders.
D)   Is the same as a corporation.
E)   May only have two partners.F) C) and D)
G) A) and E)

Question 6

External users of accounting information include all of the following except:

Accepted Answer

A)   Shareholders.
B)   Customers.
C)   Purchasing managers.
D)   Government regulators.
E)   Creditors.F) C) and D)
G) B) and E)

Question 7

Distributions of assets by a business to its owners are called:

Accepted Answer

A)   Withdrawals.
B)   Expenses.
C)   Assets.
D)   Retained earnings.
E)   Net Income.F) A) and B)
G) A) and C)

Question 8

A balance sheet lists:

Accepted Answer

A)   The types and amounts of the revenues and expenses of a business.
B)   Only the information about what happened to equity during a time period.
C)   The types and amounts of assets, liabilities, and equity of a business as of a specific date.
D)   The inflows and outflows of cash during the period.
E)   The assets and liabilities of a company but not the owner's equity.F) A) and B)
G) C) and D)

Question 9

A net loss occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 10

Cash investments by owners are listed on which of the following statements?

Accepted Answer

A)   Balance sheet.
B)   Income statement.
C)   Statement of owner's equity only.
D)   Statement of cash flows only.
E)   Statement of owner's equity and statement of cash flows.F) A) and B)
G) C) and D)

Question 11

The Sarbanes-Oxley Act (SOX) does not require public companies to apply both accounting oversight and stringent internal controls.

Accepted Answer

A) True 
 B)False

Question 12

The difference between a company's assets and its liabilities, or net assets is:

Accepted Answer

A)   Net income.
B)   Expense.
C)   Equity.
D)   Revenue.
E)   Net loss.F) A) and D)
G) B) and E)

Question 13

The income statement displays revenues earned and expenses incurred over a specified period of time due to earnings activities.

Accepted Answer

A) True 
 B)False

Question 14

Ending capital reported on the statement of owner's equity is calculated by adding owner investments and net losses and subtracting net incomes and withdrawals.

Accepted Answer

A) True 
 B)False

Question 15

Internal users include lenders, shareholders, brokers and managers.

Accepted Answer

A) True 
 B)False

Question 16

The accountant of Magic Video Games prepared a balance sheet immediately after each transaction was recorded. During September, the first month of operation, the following balance sheets were prepared:      Required: Describe the nature of each of these five transactions for the month of September.

Accepted Answer

The answer of The accountant of Magic Video Games prepared...

Question 17

Regulators often have legal authority over certain activities of organizations.

Accepted Answer

A) True 
 B)False

Question 18

U. S. Government Treasury bonds provide high return and low risk to investors.

Accepted Answer

A) True 
 B)False

Question 19

The _______________ assumption requires that financial information is supported by independent, unbiased evidence.

Accepted Answer

The answer of The _______________ assumption requires that financial information...

Question 20

How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?

Accepted Answer

A)   +$10,000 accounts receivable, -$10,000 accounts payable.
B)   +$10,000 accounts receivable, +$10,000 accounts payable.
C)   +$10,000 accounts receivable, +$10,000 cash.
D)   +$10,000 accounts receivable, +$10,000 revenue.
E)   +$10,000 accounts receivable, -$10,000 revenue.F) A) and B)
G) B) and E)

Exam 1: Accounting in Business

How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?

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Return on assets is often stated in ratio form as the amount of average total assets divided by income.

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A limited partnership:

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Distributions of assets by a business to its owners are called:

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Technology

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Cash investments by owners are listed on which of the following statements?

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The accountant of Magic Video Games prepared a balance sheet immediately after each transaction was recorded. During September, the first month of operation, the following balance sheets were prepared: Required: Describe the nature of each of these five transactions for the month of September.

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Planning activities are the means an organization uses to pay for resources like land, buildings, and equipment to carry out its plans.

Correct AnswerverifiedShow Answer

A net loss occurs when revenues exceed expenses.

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The income statement displays revenues earned and expenses incurred over a specified period of time due to earnings activities.

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External users of accounting information include all of the following except:

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The _______________ assumption requires that financial information is supported by independent, unbiased evidence.

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U. S. Government Treasury bonds provide high return and low risk to investors.

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Ending capital reported on the statement of owner's equity is calculated by adding owner investments and net losses and subtracting net incomes and withdrawals.

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A balance sheet lists:

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Internal users include lenders, shareholders, brokers and managers.

Correct AnswerverifiedShow Answer

The basic financial statements include all of the following except:

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The Sarbanes-Oxley Act (SOX) does not require public companies to apply both accounting oversight and stringent internal controls.

Correct AnswerverifiedShow Answer

The difference between a company's assets and its liabilities, or net assets is:

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Regulators often have legal authority over certain activities of organizations.

Correct AnswerverifiedShow Answer

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