Question 1

A company acquires equipment for $75,000 cash.This represents a(n) :

Accepted Answer

A)  Operating activity.
B)  Investing activity.
C)  Financing activity.
D)  Revenue activity.
E)  Expense activity.F) A) and E)
G) B) and C)

Question 2

On December 15 of the current year,Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in the following year.Which accounting principle would require Myers Legal Services to record the legal fees revenue in the following year and not the year the cash was received?

Accepted Answer

A)  Monetary unit assumption.
B)  Going-concern assumption.
C)  Cost principle.
D)  Business entity assumption.
E)  Revenue recognition principle.F) B) and D)
G) A) and B)

Question 3

The accounting equation can be restated as:
 Assets - Equity = Liabilities.

Accepted Answer

A) True 
 B)False

Question 4

Hal Burton began a Web Consulting practice and completed these transactions during September of the current year:
  Show the effects of the above transactions on the accounting equation of Halley Burton,Consultant.Use the following format for your answers.The first item is shown as an example.
Increase = I Decrease = D No effect = N

Accepted Answer

The answer of Hal Burton began a Web Consulting practice...

Question 5

An example of an investing activity is:

Accepted Answer

A)  Paying wages of employees.
B)  Withdrawals by the owner.
C)  Purchase of land.
D)  Selling inventory.
E)  Contribution from owner.F) C) and E)
G) A) and B)

Question 6

The primary objective of financial accounting is:

Accepted Answer

A)  To serve the decision-making needs of internal users.
B)  To provide financial statements to help external users analyze an organization's activities.
C)  To monitor and control company activities.
D)  To provide information on both the costs and benefits of looking after products and services.
E)  To know what, when, and how much to produce.F) C) and E)
G) A) and D)

Question 7

Identifying the proper ethical path is easy.

Accepted Answer

A) True 
 B)False

Question 8

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Accepted Answer

The answer of Congress passed the ______________________ to help curb...

Question 9

Identify and describe the four basic financial statements:

Accepted Answer

The four basic financial statements are ...

Question 10

The owner's claim on assets is called __________________.

Accepted Answer

The answer of The owner's claim on assets is called...

Question 11

The area of accounting aimed at serving the decision making needs of internal users is:

Accepted Answer

A)  Financial accounting.
B)  Managerial accounting.
C)  External auditing.
D)  SEC reporting.
E)  Bookkeeping.F) B) and D)
G) A) and D)

Question 12

Identify the two main groups involved in establishing generally accepted accounting principles.

Accepted Answer

The FASB is the private group ...

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

Accepted Answer

A)  $61,000 increase.
B)  $37,000 increase.
C)  $7,000 decrease.
D)  $7,000 increase.
E)  $34,000 decrease.F) A) and B)
G) D) and E)

Question 15

Using the accounting equation,equity is equal to ________________________.

Accepted Answer

assets min...

Question 16

Generally the lower the risk,the lower the return that can be expected.

Accepted Answer

A) True 
 B)False

Question 17

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period,the assets of the business must have:

Accepted Answer

A)  Decreased $105,000.
B)  Decreased $45,000.
C)  Increased $30,000.
D)  Increased $45,000.
E)  Increased $105,000.F) A) and D)
G) C) and D)

Question 18

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 19

Flash reported net income of $17,500 for the past year.At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities.By the end of the year,assets had increased to $300,000 and liabilities were $75,000.Calculate its return on assets:

Accepted Answer

A)  8.8%
B)  7.0%
C)  5.8%
D)  35.0%
E)  23.3%F) None of the above
G) A) and E)

Question 20

An accounting information system communicates data to help businesses make better decisions.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

Identify the two main groups involved in establishing generally accepted accounting principles.

Correct Answer
verified
The FASB is the private group ...
View Answer

Correct Answer
verified

Identify and describe the four basic financial statements:

Correct Answer
verified
The four basic financial statements are ...
View Answer

Flash reported net income of $17,500 for the past year.At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities.By the end of the year,assets had increased to $300,000 and liabilities were $75,000.Calculate its return on assets:

Correct Answer
verified

The accounting equation can be restated as: Assets - Equity = Liabilities.

Correct Answer
verified

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

Correct Answer
verified

Generally the lower the risk,the lower the return that can be expected.

Correct Answer
verified

Using the accounting equation,equity is equal to ________________________.

Correct Answer
verified
assets min...
View Answer

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

Correct Answer
verified

Identifying the proper ethical path is easy.

Correct Answer
verified

An example of an investing activity is:

Correct Answer
verified

The area of accounting aimed at serving the decision making needs of internal users is:

Correct Answer
verified

A company acquires equipment for $75,000 cash.This represents a(n) :

Correct Answer
verified

The owner's claim on assets is called __________________.

Correct Answer
verified

Correct Answer
verified

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period,the assets of the business must have:

Correct Answer
verified

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Correct Answer
verified

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

Correct Answer
verified

The primary objective of financial accounting is:

Correct Answer
verified

An accounting information system communicates data to help businesses make better decisions.

Correct Answer
verified

Exam 1: Accounting in Business

Identify the two main groups involved in establishing generally accepted accounting principles.

Correct AnswerverifiedThe FASB is the private group ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Identify and describe the four basic financial statements:

Correct AnswerverifiedThe four basic financial statements are ...View AnswerShow Answer

Flash reported net income of $17,500 for the past year.At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities.By the end of the year,assets had increased to $300,000 and liabilities were $75,000.Calculate its return on assets:

Correct AnswerverifiedShow Answer

The accounting equation can be restated as: Assets - Equity = Liabilities.

Correct AnswerverifiedShow Answer

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

Correct AnswerverifiedShow Answer

Generally the lower the risk,the lower the return that can be expected.

Correct AnswerverifiedShow Answer

Using the accounting equation,equity is equal to ________________________.

Correct Answerverifiedassets min...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Identifying the proper ethical path is easy.

Correct AnswerverifiedShow Answer

An example of an investing activity is:

Correct AnswerverifiedShow Answer

The area of accounting aimed at serving the decision making needs of internal users is:

Correct AnswerverifiedShow Answer

A company acquires equipment for $75,000 cash.This represents a(n) :

Correct AnswerverifiedShow Answer

The owner's claim on assets is called __________________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period,the assets of the business must have:

Correct AnswerverifiedShow Answer

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The primary objective of financial accounting is:

Correct AnswerverifiedShow Answer

An accounting information system communicates data to help businesses make better decisions.

Correct AnswerverifiedShow Answer

Correct Answer
verified
The FASB is the private group ...
View Answer

Correct Answer
verified

Correct Answer
verified
The four basic financial statements are ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
assets min...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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