Question 1

U.S. government bonds are:

Accepted Answer

A)  Low-risk and high-return investments.
B)  High-risk and high-return investments.
C)  Low-risk and low-return investments.
D)  High risk and no-return investments.
E)  High-risk and low-return investments.F) C) and D)
G) All of the above

Question 2

All of the following are true regarding ethics except:

Accepted Answer

A)  Ethics can be difficult to apply.
B)  Ethics are beliefs that distinguish right from wrong.
C)  Are critical in accounting.
D)  Ethics rules are often set for CPAs.
E)  Ethics do not affect the operations or outcome of a company.F) D) and E)
G) A) and E)

Question 3

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 4

Net income is sometimes called earnings or profit.

Accepted Answer

A) True 
 B)False

Question 5

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have:

Accepted Answer

A)  Decreased $156,000.
B)  Increased $89,000.
C)  Decreased $22,000.
D)  Increased $22,000.
E)  Increased $156,000.F) B) and E)
G) None of the above

Question 6

As a general rule, revenues should not be recognized in the accounting records when earned, but rather when cash is received.

Accepted Answer

A) True 
 B)False

Question 7

Ethical behavior requires that:

Accepted Answer

A)  Auditors invest in businesses they audit.
B)  Auditors' pay depends on the success of the client's business.
C)  Auditors' pay not depend on the success of the client's business.
D)  Analysts report information favorable to their companies.
E)  Managers use accounting information to benefit themselves.F) B) and D)
G) B) and E)

Question 8

The time period assumption:

Accepted Answer

A)  Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods.
B)  Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
C)  Means that we can express transactions and events in monetary, or money, units.
D)  Means that a business is accounted for separately from other business entities, including its owner.
E)  Prescribes that a company record the expenses it incurred to generate the revenue reported.F) B) and D)
G) C) and D)

Question 9

If assets are $365,000 and equity is $120,000, then liabilities are:

Accepted Answer

A)  $365,000.
B)  $245,000.
C)  $610,000.
D)  $120,000.
E)  $485,000.F) B) and E)
G) A) and B)

Question 10

A company reported total equity of $145,000 at the beginning of the year. The company reported $210,000 in revenues and $165,000 in expenses for the year. Liabilities at the end of the year totaled $92,000. What are the total assets of the company at the end of the year?

Accepted Answer

A)  $92,000.
B)  $45,000.
C)  $282,000.
D)  $98,000.
E)  $210,000.F) All of the above
G) B) and C)

Question 11

Increases in equity from a company's sales of products or services are:

Accepted Answer

A)  Revenues.
B)  Owner's Equity.
C)  Assets.
D)  Expenses.
E)  Liabilities.F) C) and E)
G) A) and C)

Question 12

Revenue is properly recognized:

Accepted Answer

A)  Only if the transaction creates an account receivable.
B)  At the end of the accounting period.
C)  When the customer makes an order.
D)  Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price.
E)  When cash from a sale is received.F) A) and D)
G) B) and D)

Question 13

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

Accepted Answer

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

Question 14

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Accepted Answer

A)  20.0%.
B)  6.7%.
C)  7.1%.
D)  18.8%.
E)  7.5%.F) B) and E)
G) D) and E)

Question 15

Return on assets is useful in evaluating management, analyzing and forecasting profits, and planning activities.

Accepted Answer

A) True 
 B)False

Question 16

The accounts of Mason Company at the end of the past year report the following amounts:
 $\begin{array} { l  }\text { Accounts  }&\text { Amount }\
 \text {Owner Withdrawals, G. Mason. } &\$15,500 \
 \text {Revenues } &\$97,000 \
 \text {Expenses } &\$43,800 \
 \text {Owner investments } &2,000 \
\end{array}$
 
If the beginning equity for the year was $173,000, calculate the ending equity for Mason Company.

Accepted Answer

The answer of The accounts of Mason Company at the...

Question 17

The full disclosure principle:

Accepted Answer

A)  Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
B)  Prescribes that a company record the expenses it incurred to generate the revenue reported.
C)  Prescribes that a company report the details behind financial statements that would impact users' decisions.
D)  Prescribes that accounting information is based on actual cost.
E)  Provides guidance on when a company must recognize revenue.F) A) and B)
G) C) and D)

Question 18

Define risk and return and discuss the relation between them.

Accepted Answer

Net income is often related to return, w...

Question 19

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Accepted Answer

The income statement describes a company...

Question 20

Which of the following accounts is not included in the calculation of net income?

Accepted Answer

A)  Rent expense.
B)  Cash.
C)  Rent revenue.
D)  Services revenue.
E)  Wages expense.F) A) and D)
G) C) and E)

Exam 1: Accounting in Business

U.S. government bonds are:

Correct Answer
verified

Which of the following accounts is not included in the calculation of net income?

Correct Answer
verified

If assets are $365,000 and equity is $120,000, then liabilities are:

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The full disclosure principle:

Correct Answer
verified

Net income is sometimes called earnings or profit.

Correct Answer
verified

Define risk and return and discuss the relation between them.

Correct Answer
verified
Net income is often related to return, w...
View Answer

Revenue is properly recognized:

Correct Answer
verified

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Correct Answer
verified
The income statement describes a company...
View Answer

All of the following are true regarding ethics except:

Correct Answer
verified

Return on assets is useful in evaluating management, analyzing and forecasting profits, and planning activities.

Correct Answer
verified

The time period assumption:

Correct Answer
verified

Ethical behavior requires that:

Correct Answer
verified

Increases in equity from a company's sales of products or services are:

Correct Answer
verified

As a general rule, revenues should not be recognized in the accounting records when earned, but rather when cash is received.

Correct Answer
verified

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Correct Answer
verified

A company reported total equity of $145,000 at the beginning of the year. The company reported $210,000 in revenues and $165,000 in expenses for the year. Liabilities at the end of the year totaled $92,000. What are the total assets of the company at the end of the year?

Correct Answer
verified

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have:

Correct Answer
verified

Exam 1: Accounting in Business

U.S. government bonds are:

Correct AnswerverifiedShow Answer

Which of the following accounts is not included in the calculation of net income?

Correct AnswerverifiedShow Answer

If assets are $365,000 and equity is $120,000, then liabilities are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The full disclosure principle:

Correct AnswerverifiedShow Answer

Net income is sometimes called earnings or profit.

Correct AnswerverifiedShow Answer

Define risk and return and discuss the relation between them.

Correct AnswerverifiedNet income is often related to return, w...View AnswerShow Answer

Revenue is properly recognized:

Correct AnswerverifiedShow Answer

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Correct AnswerverifiedThe income statement describes a company...View AnswerShow Answer

All of the following are true regarding ethics except:

Correct AnswerverifiedShow Answer

Return on assets is useful in evaluating management, analyzing and forecasting profits, and planning activities.

Correct AnswerverifiedShow Answer

The time period assumption:

Correct AnswerverifiedShow Answer

Ethical behavior requires that:

Correct AnswerverifiedShow Answer

Increases in equity from a company's sales of products or services are:

Correct AnswerverifiedShow Answer

As a general rule, revenues should not be recognized in the accounting records when earned, but rather when cash is received.

Correct AnswerverifiedShow Answer

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Correct AnswerverifiedShow Answer

A company reported total equity of $145,000 at the beginning of the year. The company reported $210,000 in revenues and $165,000 in expenses for the year. Liabilities at the end of the year totaled $92,000. What are the total assets of the company at the end of the year?

Correct AnswerverifiedShow Answer

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Net income is often related to return, w...
View Answer

Correct Answer
verified

Correct Answer
verified
The income statement describes a company...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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