Question 1

Liabilities are owner claims on assets.

Accepted Answer

A) True 
 B)False

Question 2

The income statement shows the financial position of a business on a specific date.

Accepted Answer

A) True 
 B)False

Question 3

An example of a financing activity is:

Accepted Answer

A)  Buying office supplies.
B)  Obtaining a long-term loan.
C)  Buying office equipment.
D)  Selling inventory.
E)  Buying land.F) C) and D)
G) A) and D)

Question 4

All of the following are classified as assets except:

Accepted Answer

A)  Accounts Payable.
B)  Accounts Receivable.
C)  Cash.
D)  Supplies.
E)  Prepaid Insurance.F) A) and C)
G) C) and D)

Question 5

In a business decision where there are ethical concerns,the preferred course of action should be one that:

Accepted Answer

A)  Is agreed upon by the most managers.
B)  Maximizes the company's profits.
C)  Results in maintaining operations at the current level.
D)  Costs the least to implement.
E)  Avoids casting doubt on the decision maker and upholds trust.F) B) and E)
G) A) and B)

Question 6

The monetary assumption:

Accepted Answer

A)  Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
B)  Means that we can express transactions and events in monetary,or money,units.
C)  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.
D)  Means that a business is accounted for separately from other business entities,including its owners.
E)  Prescribes that a company record the expenses it incurred to generate the revenue reported.F) A) and B)
G) C) and D)

Question 7

A limited liability company:

Accepted Answer

A)  Has one or more owners,called members.
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) A) and C)
G) B) and E)

Question 8

External users include lenders,shareholders,customers,and regulators.

Accepted Answer

A) True 
 B)False

Question 9

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 C)
G) C) and E)

Question 10

The materiality constraint looks at both the importance and relative size of an amount.

Accepted Answer

A) True 
 B)False

Question 11

Verity Siding Company,whose sole stockholder is S.Verity,began operations in May and completed the following transactions during that first month of operations.Show the effects of the transactions on the accounts of the accounting equation by recording increases and decreases in the appropriate columns in the table below.Do not determine new account balances after each transaction.Determine the final total for each account and verify that the equation is in balance.

Accepted Answer

The answer of Verity Siding Company,whose sole stockholder is S.Verity,began...

Question 12

U.S.government bonds are:

Accepted Answer

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

Question 13

Cragmont has beginning equity of $277,000,net income of $63,000,dividends of $25,000 and no additional investments by stockholders during the period.Its ending equity is:

Accepted Answer

A)  $365,000.
B)  $239,000.
C)  $189,000.
D)  $315,000.
E)  $277,000.F) All of the above
G) A) and D)

Question 14

________are the increases in equity from a company's sales of products and services to customers.

Accepted Answer

The answer of ________are the increases in equity from a...

Question 15

The International Accounting Standards Board (IASB) :

Accepted Answer

A)  Identifies globally preferred accounting practices to increase comparability among financial statements.
B)  Is the government group that establishes reporting requirements for companies that issue stock to the investing public.
C)  Has the authority to impose its standards on companies around the world.
D)  Is the only source of generally accepted accounting principles (GAAP) .
E)  Only applies to companies that are members of the European Union.F) C) and E)
G) A) and B)

Question 16

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

Accepted Answer

The Financial Accounting Standards Board...

Question 17

From the information given below,prepare a November income statement,a November statement of retained earnings,and a November 30 balance sheet.On November 1 of the current year,Victoria Garza,the sole stockholder,began Garza Décor with an initial investment of $50,000 cash in exchange for common stock.On November 30,her records showed the following items and amounts.

Accepted Answer

The answer of From the information given below,prepare a November...

Question 18

Using the accounting equation,equity is equal to ________.

Accepted Answer

assets min...

Question 19

The expense recognition principle,also called the matching principle:

Accepted Answer

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

Question 20

The financial statement that shows the beginning balance of retained earnings; the changes in equity that resulted from net income (or net loss) ; dividends; and the ending retained earnings balance,is the:

Accepted Answer

A)  Statement of financial position.
B)  Statement of cash flows.
C)  Balance sheet.
D)  Income statement.
E)  Statement of retained earnings.F) All of the above
G) B) and C)

Exam 1: Introducing Financial Statements

In a business decision where there are ethical concerns,the preferred course of action should be one that:

Correct Answer
verified

The income statement shows the financial position of a business on a specific date.

Correct Answer
verified

Liabilities are owner claims on assets.

Correct Answer
verified

The financial statement that shows the beginning balance of retained earnings; the changes in equity that resulted from net income (or net loss) ; dividends; and the ending retained earnings balance,is the:

Correct Answer
verified

A limited liability company:

Correct Answer
verified

Cragmont has beginning equity of $277,000,net income of $63,000,dividends of $25,000 and no additional investments by stockholders during the period.Its ending equity is:

Correct Answer
verified

The International Accounting Standards Board (IASB) :

Correct Answer
verified

All of the following are classified as assets except:

Correct Answer
verified

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

Correct Answer
verified

The monetary assumption:

Correct Answer
verified

Correct Answer
verified

Using the accounting equation,equity is equal to ________.

Correct Answer
verified
assets min...
View Answer

Correct Answer
verified

The materiality constraint looks at both the importance and relative size of an amount.

Correct Answer
verified

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

Correct Answer
verified
The Financial Accounting Standards Board...
View Answer

U.S.government bonds are:

Correct Answer
verified

An example of a financing activity is:

Correct Answer
verified

External users include lenders,shareholders,customers,and regulators.

Correct Answer
verified

The expense recognition principle,also called the matching principle:

Correct Answer
verified

________are the increases in equity from a company's sales of products and services to customers.

Correct Answer
verified

Exam 1: Introducing Financial Statements

In a business decision where there are ethical concerns,the preferred course of action should be one that:

Correct AnswerverifiedShow Answer

The income statement shows the financial position of a business on a specific date.

Correct AnswerverifiedShow Answer

Liabilities are owner claims on assets.

Correct AnswerverifiedShow Answer

The financial statement that shows the beginning balance of retained earnings; the changes in equity that resulted from net income (or net loss) ; dividends; and the ending retained earnings balance,is the:

Correct AnswerverifiedShow Answer

A limited liability company:

Correct AnswerverifiedShow Answer

Cragmont has beginning equity of $277,000,net income of $63,000,dividends of $25,000 and no additional investments by stockholders during the period.Its ending equity is:

Correct AnswerverifiedShow Answer

The International Accounting Standards Board (IASB) :

Correct AnswerverifiedShow Answer

All of the following are classified as assets except:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The monetary assumption:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Using the accounting equation,equity is equal to ________.

Correct Answerverifiedassets min...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The materiality constraint looks at both the importance and relative size of an amount.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe Financial Accounting Standards Board...View AnswerShow Answer

U.S.government bonds are:

Correct AnswerverifiedShow Answer

An example of a financing activity is:

Correct AnswerverifiedShow Answer

External users include lenders,shareholders,customers,and regulators.

Correct AnswerverifiedShow Answer

The expense recognition principle,also called the matching principle:

Correct AnswerverifiedShow Answer

________are the increases in equity from a company's sales of products and services to customers.

Correct AnswerverifiedShow Answer

Correct Answer
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assets min...
View Answer

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The Financial Accounting Standards Board...
View Answer

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