Question 1

Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

Accepted Answer

A)   Going-concern assumption.
B)   Matching principle.
C)   Cost principle.
D)   Business entity assumption.
E)   Consideration assumption.F) A) and B)
G) A) and D)

Question 2

The business entity principle means that a business will continue operating for an indefinite period of time.

Accepted Answer

A) True 
 B)False

Question 3

The ________________ assumption states that transactions and events are expressed in money units.

Accepted Answer

The answer of The ________________ assumption states that transactions and...

Question 4

Select the appropriate financial statement for each of the following items.
(Note: some items may appear on more than one financial statement.)

Accepted Answer

The answer of Select the appropriate financial statement for each...

Question 5

Describe the relation between revenues, expenses, and net income.

Accepted Answer

Revenues are the increases in ...

Question 6

Revenues are increases in equity from a company's earning activities.

Accepted Answer

A) True 
 B)False

Question 7

________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

Accepted Answer

The answer of ________________ activities involve the acquisition and disposal...

Question 8

How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?

Accepted Answer

A)   +$10,000 accounts receivable, -$10,000 accounts payable.
B)   +$10,000 accounts receivable, +$10,000 accounts payable.
C)   +$10,000 accounts receivable, +$10,000 cash.
D)   +$10,000 accounts receivable, +$10,000 revenue.
E)   +$10,000 accounts receivable, -$10,000 revenue.F) A) and C)
G) All of the above

Question 9

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

Accepted Answer

A)   $120,000.
B)   $245,000.
C)   $365,000.
D)   $485,000.
E)   $610,000.F) None of the above
G) A) and B)

Question 10

Assets are the resources of a company and are expected to yield future benefits.

Accepted Answer

A) True 
 B)False

Question 11

A corporation:

Accepted Answer

A)   Is a business legally separate from its owners.
B)   Is controlled by the IASB.
C)   Has shareholders who have unlimited liability for the acts of the corporation.
D)   Is the same as a limited liability partnership.
E)   Is not subject to double taxation.F) B) and D)
G) A) and C)

Question 12

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Accepted Answer

A)   Going-concern assumption.
B)   Matching principle.
C)   Cost principle.
D)   Business entity assumption.
E)   Consideration assumption.F) C) and D)
G) B) and E)

Question 13

The rule that (1)  requires revenue to be recognized at the time it is earned, (2)  allows the inflow of assets associated with revenue to be in a form other than cash, and (3)  measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services, is called the:

Accepted Answer

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

Question 14

The income statement reports all of the following except:

Accepted Answer

A)   Revenues earned by a business.
B)   Expenses incurred by a business.
C)   Assets owned by a business.
D)   Net income or loss earned by a business.
E)   The time period over which the earnings occurred.F) A) and C)
G) A) and D)

Question 15

The characteristics below apply to at least one of the forms of business organization.
a. Is a separate legal entity.
b. Is allowed to be owned by one person only.
c. Owner or owners are personally liable for debts of the business.
d. Is a taxable entity.
e. Is a business entity.
f. May have a contract specifying the division of profits among the owners.
g. Has an unlimited life
Use the following format to indicate (with a "yes" or "no") whether or not a characteristic applies to each type of business organization.

Accepted Answer

The answer of The characteristics below apply to at least...

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The statement of cash flows reports all of the following except:

Accepted Answer

A)   Cash flows from operating activities.
B)   Cash flows from investing activities.
C)   Cash flows from financing activities.
D)   The net increase or decrease in assets for the period reported.
E)   The net increase or decrease in cash for the period reported.F) C) and D)
G) A) and C)

Question 18

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 E)
G) C) and D)

Question 19

The International Accounting Standards Board (IASB)

Accepted Answer

A)   Hopes to create harmony among accounting practices of different countries.
B)   Is the government group that establishes reporting requirements for companies that issue shares to the public.
C)   Has the authority to impose its standards on companies.
D)   Is the only source of generally accepted accounting principles (GAAP) .
E)   Only applies to companies that are members of the European Union.F) B) and E)
G) A) and C)

Question 20

Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is:

Accepted Answer

A)   $223,000.
B)   $240,000.
C)   $268,000.
D)   $274,000.
E)   $208,000.F) A) and B)
G) C) and E)

Exam 1: Accounting in Business

Select the appropriate financial statement for each of the following items. (Note: some items may appear on more than one financial statement.)

Correct Answer
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The business entity principle means that a business will continue operating for an indefinite period of time.

Correct Answer
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Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Correct Answer
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Describe the relation between revenues, expenses, and net income.

Correct Answer
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Revenues are the increases in ...
View Answer

A corporation:

Correct Answer
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________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

Correct Answer
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Correct Answer
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How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?

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

Correct Answer
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Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

Correct Answer
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Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is:

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

Correct Answer
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Correct Answer
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Assets are the resources of a company and are expected to yield future benefits.

Correct Answer
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The income statement reports all of the following except:

Correct Answer
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The ________________ assumption states that transactions and events are expressed in money units.

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

Correct Answer
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The statement of cash flows reports all of the following except:

Correct Answer
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Revenues are increases in equity from a company's earning activities.

Correct Answer
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The International Accounting Standards Board (IASB)

Correct Answer
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Exam 1: Accounting in Business

Select the appropriate financial statement for each of the following items. (Note: some items may appear on more than one financial statement.)

Correct AnswerverifiedShow Answer

The business entity principle means that a business will continue operating for an indefinite period of time.

Correct AnswerverifiedShow Answer

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Correct AnswerverifiedShow Answer

Describe the relation between revenues, expenses, and net income.

Correct AnswerverifiedRevenues are the increases in ...View AnswerShow Answer

A corporation:

Correct AnswerverifiedShow Answer

________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

Correct AnswerverifiedShow Answer

Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assets are the resources of a company and are expected to yield future benefits.

Correct AnswerverifiedShow Answer

The income statement reports all of the following except:

Correct AnswerverifiedShow Answer

The ________________ assumption states that transactions and events are expressed in money units.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The statement of cash flows reports all of the following except:

Correct AnswerverifiedShow Answer

Revenues are increases in equity from a company's earning activities.

Correct AnswerverifiedShow Answer

The International Accounting Standards Board (IASB)

Correct AnswerverifiedShow Answer

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Revenues are the increases in ...
View Answer

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