Question 1

Identifying the proper ethical path is easy.

Accepted Answer

A) True 
 B)False

Question 2

Liabilities are the owner's claim on assets.

Accepted Answer

A) True 
 B)False

Question 3

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called:

Accepted Answer

A)   A Balance sheet (Statement of Financial Position) .
B)   A Statement of changes in equity.
C)   A Statement of cash flows.
D)   An Income statement (Statement of Comprehensive Income) .
E)   A Statement of financial position.F) A) and B)
G) All of the above

Question 4

Match the following terms with the appropriate definition.

Accepted Answer

The answer of Match the following terms with the appropriate...

Question 5

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease? By what amount?

Accepted Answer

Assets increased $62...

Question 6

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) None of the above
G) C) and D)

Question 7

The balance sheet is based on the accounting equation.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

As a general rule, revenues should not be recognized in the accounting records until it is received in cash.

Accepted Answer

A) True 
 B)False

Question 10

Use the following information as of December 31 to determine equity.

Accepted Answer

A)   $57,000.
B)   $141,000.
C)   $297,000.
D)   $438,000.
E)   $579,000.F) A) and C)
G) B) and D)

Question 11

A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

Accepted Answer

$570,000. The cost principle r...

Question 12

A company's balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of owner's equity?

Accepted Answer

A)   $17,000.
B)   $29,000.
C)   $71,000.
D)   $88,000.
E)   $105,000.F) C) and E)
G) B) and E)

Question 13

Identify the users and uses of accounting information.

Accepted Answer

There are two general types of users of ...

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Net income occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 16

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 17

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

Accepted Answer

A)   Income statement equation.
B)   Accounting equation.
C)   Business equation.
D)   Return on equity ratio.
E)   Net income.F) C) and D)
G) All of the above

Question 18

Creditors' claims on the assets of a company are called:

Accepted Answer

A)   Net losses.
B)   Expenses.
C)   Revenues.
D)   Equity.
E)   Liabilities.F) D) and E)
G) B) and D)

Question 19

In the U.S., the Securities and Exchange Commission (SEC) is a government agency that has legal authority to establish GAAP.

Accepted Answer

A) True 
 B)False

Question 20

The ______________ assumption assumes business will continue operating indefinitely instead of being closed or sold.

Accepted Answer

The answer of The ______________ assumption assumes business will continue...

Exam 1: Accounting in Business

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease? By what amount?

Correct AnswerverifiedAssets increased $62...View AnswerShow Answer

Match the following terms with the appropriate definition.

Correct AnswerverifiedShow Answer

Liabilities are the owner's claim on assets.

Correct AnswerverifiedShow Answer

A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

Correct Answerverified$570,000. The cost principle r...View AnswerShow Answer

Identifying the proper ethical path is easy.

Correct AnswerverifiedShow Answer

Identify the users and uses of accounting information.

Correct AnswerverifiedThere are two general types of users of ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A company's balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of owner's equity?

Correct AnswerverifiedShow Answer

As a general rule, revenues should not be recognized in the accounting records until it is received in cash.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Use the following information as of December 31 to determine equity.

Correct AnswerverifiedShow Answer

Net income occurs when revenues exceed expenses.

Correct AnswerverifiedShow Answer

The ______________ assumption assumes business will continue operating indefinitely instead of being closed or sold.

Correct AnswerverifiedShow Answer

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called:

Correct AnswerverifiedShow Answer

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

Correct AnswerverifiedShow Answer

An example of a financing activity is:

Correct AnswerverifiedShow Answer

In the U.S., the Securities and Exchange Commission (SEC) is a government agency that has legal authority to establish GAAP.

Correct AnswerverifiedShow Answer

Creditors' claims on the assets of a company are called:

Correct AnswerverifiedShow Answer

The balance sheet is based on the accounting equation.

Correct AnswerverifiedShow Answer

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Assets increased $62...
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$570,000. The cost principle r...
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There are two general types of users of ...
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