Question 1

Which of the following events is not a business transaction?

Accepted Answer

A)  Issuance of stock in exchange for cash
B)  Hired employees
C)  Incurred utility expenses for the month
D)  Earned revenue for services providedE) None of the above
F) A) and B)

Question 2

The cost of an asset and its fair value are

Accepted Answer

A)  never the same.
B)  the same when the asset is sold.
C)  irrelevant when the asset is used by the business in its operations.
D)  the same on the date of acquisition.E) All of the above
F) None of the above

Question 3

Which of the following is not part of the accounting process?

Accepted Answer

A)  Recording
B)  Identifying
C)  Financial decision-making
D)  CommunicatingE) A) and B)
F) All of the above

Question 4

Fat Possum's Service Shop started the year with total assets of $330,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $420,000 in expenses, and paid dividends of $60,000. The net income reported by Fat Possum's Service Shop for the year was

Accepted Answer

A)  $150,000.
B)  $210,000.
C)  $240,000.
D)  $270,000.E) None of the above
F) A) and D)

Question 5

At the time an asset is acquired, cost and fair value should be the same.

Accepted Answer

A) True 
 B)False

Question 6

Below is a list of important abbreviations widely used in business.For each abbreviation, give the full designation.

Accepted Answer

The answer of Below is a list of important abbreviations...

Question 7

Liabilities of a company are owed to

Accepted Answer

A)  debtors.
B)  benefactors.
C)  creditors.
D)  underwriters.E) None of the above
F) A) and B)

Question 8

The first part of the accounting process is

Accepted Answer

A)  communicating.
B)  identifying.
C)  processing.
D)  recording.E) B) and C)
F) None of the above

Question 9

A proprietorship is a business

Accepted Answer

A)  owned by one person.
B)  owned by two or more persons.
C)  organized as a separate legal entity under state corporation law.
D)  owned by a governmental agency.E) All of the above
F) A) and B)

Question 10

Auditing is

Accepted Answer

A)  the examination of financial statements by a CPA in order to express an opinion on their fairness.
B)  a part of accounting that involves only the recording of economic events.
C)  an area of accounting that involves such activities as cost accounting, budgeting, and accounting information systems.
D)  conducted by the Securities and Exchange Commission to ensure that registered financial statements are presented fairly.E) C) and D)
F) B) and D)

Question 11

Stockholders' equity is decreased by

Accepted Answer

A)  assets.
B)  revenues.
C)  expenses.
D)  liabilities.E) A) and C)
F) None of the above

Question 12

Mofro's Computer Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000.During the year, the business recorded $500,000 in computer repair revenues, $300,000 in expenses, and Mofro paid dividends of $50,000.Mofro's stockholders' equity changed by what amount from the beginning of the year to the end of the year?

Accepted Answer

A)  $100,000.
B)  $150,000.
C)  $200,000.
D)  $250,000.E) A) and C)
F) B) and C)

Question 13

The Securities and Exchange Commission oversees U.S.financial markets and accounting standard-setting bodies.

Accepted Answer

A) True 
 B)False

Question 14

Financial statements are the primary means of communicating accounting information to interested parties.

Accepted Answer

A) True 
 B)False

Question 15

The economic entity assumption requires that the activities

Accepted Answer

A)  of different entities can be combined if all the entities are corporations.
B)  must be reported to the Securities and Exchange Commission.
C)  of a sole proprietorship cannot be distinguished from the personal economic events of its owners.
D)  of an entity be kept separate from the activities of its owner.E) None of the above
F) C) and D)

Question 16

As of June 30, 2022, Actual Tigers Company has assets of $100,000 and stockholders' equity of $40,000.What are the liabilities for Actual Tigers Company as of June 30, 2022?

Accepted Answer

A)  $40,000
B)  $60,000
C)  $100,000
D)  $140,000E) C) and D)
F) A) and B)

Question 17

IFRS, compared to GAAP, tends to be more

Accepted Answer

A)  detailed.
B)  rules-based.
C)  principles-based.
D)  full of disclosure requirements.IFRS.E) B) and C)
F) C) and D)

Question 18

Which of the following is an external user of accounting information?

Accepted Answer

A)  Labor union
B)  Finance director
C)  Company officer
D)  ManagerE) A) and D)
F) C) and D)

Question 19

On June 1, 2022, Secretly Canadian Company prepared a balance sheet that shows the following:  Shortly thereafter, all of the assets were sold for cash.How would the balance sheet appear immediately after the sale of the assets for cash for each of the following cases?

Accepted Answer

The answer of On June 1, 2022, Secretly Canadian Company...

Question 20

The accounting process is correctly sequenced as

Accepted Answer

A)  identification, communication, recording.
B)  recording, communication, identification.
C)  identification, recording, communication.
D)  communication, recording, identification.E) None of the above
F) All of the above

Exam 1: Accounting in Action

Stockholders' equity is decreased by

Correct Answer
verified

Liabilities of a company are owed to

Correct Answer
verified

Below is a list of important abbreviations widely used in business.For each abbreviation, give the full designation.

Correct Answer
verified

At the time an asset is acquired, cost and fair value should be the same.

Correct Answer
verified

On June 1, 2022, Secretly Canadian Company prepared a balance sheet that shows the following: Shortly thereafter, all of the assets were sold for cash.How would the balance sheet appear immediately after the sale of the assets for cash for each of the following cases?

Correct Answer
verified

The cost of an asset and its fair value are

Correct Answer
verified

The first part of the accounting process is

Correct Answer
verified

Which of the following is an external user of accounting information?

Correct Answer
verified

Correct Answer
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A proprietorship is a business

Correct Answer
verified

Auditing is

Correct Answer
verified

Financial statements are the primary means of communicating accounting information to interested parties.

Correct Answer
verified

IFRS, compared to GAAP, tends to be more

Correct Answer
verified

As of June 30, 2022, Actual Tigers Company has assets of $100,000 and stockholders' equity of $40,000.What are the liabilities for Actual Tigers Company as of June 30, 2022?

Correct Answer
verified

Which of the following events is not a business transaction?

Correct Answer
verified

The accounting process is correctly sequenced as

Correct Answer
verified

Which of the following is not part of the accounting process?

Correct Answer
verified

Fat Possum's Service Shop started the year with total assets of $330,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $420,000 in expenses, and paid dividends of $60,000. The net income reported by Fat Possum's Service Shop for the year was

Correct Answer
verified

The Securities and Exchange Commission oversees U.S.financial markets and accounting standard-setting bodies.

Correct Answer
verified

The economic entity assumption requires that the activities

Correct Answer
verified

Exam 1: Accounting in Action

Stockholders' equity is decreased by

Correct AnswerverifiedShow Answer

Liabilities of a company are owed to

Correct AnswerverifiedShow Answer

Below is a list of important abbreviations widely used in business.For each abbreviation, give the full designation.

Correct AnswerverifiedShow Answer

At the time an asset is acquired, cost and fair value should be the same.

Correct AnswerverifiedShow Answer

On June 1, 2022, Secretly Canadian Company prepared a balance sheet that shows the following: Shortly thereafter, all of the assets were sold for cash.How would the balance sheet appear immediately after the sale of the assets for cash for each of the following cases?

Correct AnswerverifiedShow Answer

The cost of an asset and its fair value are

Correct AnswerverifiedShow Answer

The first part of the accounting process is

Correct AnswerverifiedShow Answer

Which of the following is an external user of accounting information?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A proprietorship is a business

Correct AnswerverifiedShow Answer

Auditing is

Correct AnswerverifiedShow Answer

Financial statements are the primary means of communicating accounting information to interested parties.

Correct AnswerverifiedShow Answer

IFRS, compared to GAAP, tends to be more

Correct AnswerverifiedShow Answer

As of June 30, 2022, Actual Tigers Company has assets of $100,000 and stockholders' equity of $40,000.What are the liabilities for Actual Tigers Company as of June 30, 2022?

Correct AnswerverifiedShow Answer

Which of the following events is not a business transaction?

Correct AnswerverifiedShow Answer

The accounting process is correctly sequenced as

Correct AnswerverifiedShow Answer

Which of the following is not part of the accounting process?

Correct AnswerverifiedShow Answer

Fat Possum's Service Shop started the year with total assets of $330,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $420,000 in expenses, and paid dividends of $60,000. The net income reported by Fat Possum's Service Shop for the year was

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission oversees U.S.financial markets and accounting standard-setting bodies.

Correct AnswerverifiedShow Answer

The economic entity assumption requires that the activities

Correct AnswerverifiedShow Answer

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