Question 1

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Accepted Answer

A) True 
 B)False

Question 2

Match each of the following terms with the most appropriate definition.
-Decreases in equity from costs of providing products or services to customers.

Accepted Answer

A)  Assets
B)  Expenses
C)  Return on assets
D)  Accounting equation
E)  RiskF) Common stockG) DividendsH) LiabilitiesI) D) and E)
J) C) and F)

Question 3

Rent expense appears on which of the following statements?

Accepted Answer

A)   Balance sheet.
B)   Income statement.
C)   Statement of retained earnings.
D)   Statement of periodic expenses.
E)   Statement of cash flows only.F) B) and E)
G) A) and E)

Question 4

The basic financial statements include all of the following except:

Accepted Answer

A)   Balance Sheet.
B)   Income Statement.
C)   Statement of Retained Earnings.
D)   Statement of Cash Flows.
E)   Statement of Changes in Assets.F) A) and B)
G) A) and C)

Question 5

Match the following terms with the appropriate definition.
-Statement of retained earnings.

Accepted Answer

A)  The governmental agency that has the legal authority to establish accounting rules.
B)  Prescribes that assets and services to be recorded initially on a cash or equal-to-cash basis.
C)  A report that describes a company's financial position at a point in time.
D)  A financial statement that reports the changes in equity over the reporting period; including increases from net income and decreases from dividends or net losses.
E)  The concepts and rules that govern financial accounting.F) A report that identifies cash receipts and cash payments over a period of time.G) A principle that requires the information in financial statements to be supported by independent unbiased evidence.H) An independent group consisting of individuals from many countries that identify preferred accounting practices.I) Presumes that the life of a company can be divided into periods for reporting purposes.J) Prescribes that a company report the details behind financial statements that would impact user decisions.K) D) and I)
L) A) and I)

Question 6

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.There were no stockholder investments or dividends during the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Accepted Answer

A)   $45,000.
B)   $92,000.
C)   $98,000.
D)   $210,000.
E)   $282,000.F) C) and D)
G) B) and D)

Question 7

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 8

Assets created by selling goods and services on credit are:

Accepted Answer

A)   Accounts payable.
B)   Accounts receivable.
C)   Liabilities.
D)   Expenses.
E)   Equity.F) A) and B)
G) A) and C)

Question 9

Match each of the following terms with the most appropriate definition.
-A financial ratio stated as income divided by assets invested.

Accepted Answer

A)  Assets
B)  Expenses
C)  Return on assets
D)  Accounting equation
E)  RiskF) Common stockG) DividendsH) LiabilitiesI) B) and H)
J) C) and F)

Question 10

Match the following terms with the appropriate definition.
-Events

Accepted Answer

A)  The principle that assumes transactions and events can be expressed in money units.
B)  The cost of assets or services used to earn revenue.
C)  The principle that requires a business to be accounted for separately from its owners.
D)  Describes a company's revenues and expenses along with the resulting net income or loss over a period of time.
E)  Creditor's claims on assets.F) The relation between a company's assets, liabilities, and equity.G) The principle that revenue is recorded when earned through providing goods or services.H) A financial statement that lists cash inflows (receipts)  and cash outflows (payments) ; the cash flows are arranged by operating, investing, and financing activities.I) Happenings, such as changes in market value, that effect the accounting equation and are reliably measured.J) E) and G)
K) B) and G)

Question 11

Match each of the following terms with the most appropriate definition.
-The uncertainty about the return to be earned.

Accepted Answer

A)  Assets
B)  Expenses
C)  Return on assets
D)  Accounting equation
E)  RiskF) Common stockG) DividendsH) LiabilitiesI) F) and H)
J) B) and H)

Question 12

When expenses exceed revenues,the resulting change in equity is called:

Accepted Answer

A)   Net assets.
B)   Negative equity.
C)   Net loss.
D)   Net income.
E)   A liability.F) A) and E)
G) All of the above

Question 13

The four basic financial statements include the balance sheet,income statement,statement of retained earnings,and statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 14

Contessa Company collected $42,000 cash on its accounts receivable.The effects of this transaction as reflected in the accounting equation are:

Accepted Answer

A)   Total assets decrease and equity increases.
B)   Both total assets and total liabilities decrease.
C)   Total assets, total liabilities, and total equity are unchanged.
D)   Both total assets and equity are unchanged and liabilities increase.
E)   Total assets increase and equity decreases.F) A) and E)
G) B) and D)

Question 15

Accounting is an information and measurement system that identifies,records,and communicates relevant,reliable,and comparable information about an organization's business activities.

Accepted Answer

A) True 
 B)False

Question 16

Stockholder investments are increases in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 17

Prepare a April 30 balance sheet in proper form for Two Rivers Vending Service from the following alphabetical list of the accounts at April 30:
 $\begin{array}{llr}
  \text {  Accounts receivable} &\$10,000\
 \text { Accounts payable  } &18,000\
 \text {Building   } &28,000\
 \text { Cash } &10,000\
 \text {  Notes payable} &47,000\
 \text {  Office equipment} &12,000\
 \text { Stockholders' equity } &?\
 \text {Trucks  } &55,000\
\end{array}$

Accepted Answer

None...

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The going concern 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) All of the above
G) B) and E)

Question 20

The term ________ refers to a liability that promises a future outflow of resources.

Accepted Answer

The answer of The term ________ refers to a liability...

Exam 1: Accounting in Business

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Correct Answer
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The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Correct Answer
verified

Correct Answer
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None...
View Answer

The going concern assumption:

Correct Answer
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Match each of the following terms with the most appropriate definition. -Decreases in equity from costs of providing products or services to customers.

Correct Answer
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Stockholder investments are increases in equity from a company's earnings activities.

Correct Answer
verified

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

Correct Answer
verified

Match each of the following terms with the most appropriate definition. -The uncertainty about the return to be earned.

Correct Answer
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When expenses exceed revenues,the resulting change in equity is called:

Correct Answer
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Accounting is an information and measurement system that identifies,records,and communicates relevant,reliable,and comparable information about an organization's business activities.

Correct Answer
verified

Match the following terms with the appropriate definition. -Statement of retained earnings.

Correct Answer
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The term ________ refers to a liability that promises a future outflow of resources.

Correct Answer
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Match each of the following terms with the most appropriate definition. -A financial ratio stated as income divided by assets invested.

Correct Answer
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The four basic financial statements include the balance sheet,income statement,statement of retained earnings,and statement of cash flows.

Correct Answer
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The basic financial statements include all of the following except:

Correct Answer
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Match the following terms with the appropriate definition. -Events

Correct Answer
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Contessa Company collected $42,000 cash on its accounts receivable.The effects of this transaction as reflected in the accounting equation are:

Correct Answer
verified

Rent expense appears on which of the following statements?

Correct Answer
verified

Assets created by selling goods and services on credit are:

Correct Answer
verified

Exam 1: Accounting in Business

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Correct AnswerverifiedShow Answer

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNone...View AnswerShow Answer

The going concern assumption:

Correct AnswerverifiedShow Answer

Match each of the following terms with the most appropriate definition. -Decreases in equity from costs of providing products or services to customers.

Correct AnswerverifiedShow Answer

Stockholder investments are increases in equity from a company's earnings activities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Match each of the following terms with the most appropriate definition. -The uncertainty about the return to be earned.

Correct AnswerverifiedShow Answer

When expenses exceed revenues,the resulting change in equity is called:

Correct AnswerverifiedShow Answer

Accounting is an information and measurement system that identifies,records,and communicates relevant,reliable,and comparable information about an organization's business activities.

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition. -Statement of retained earnings.

Correct AnswerverifiedShow Answer

The term ________ refers to a liability that promises a future outflow of resources.

Correct AnswerverifiedShow Answer

Match each of the following terms with the most appropriate definition. -A financial ratio stated as income divided by assets invested.

Correct AnswerverifiedShow Answer

The four basic financial statements include the balance sheet,income statement,statement of retained earnings,and statement of cash flows.

Correct AnswerverifiedShow Answer

The basic financial statements include all of the following except:

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition. -Events

Correct AnswerverifiedShow Answer

Contessa Company collected $42,000 cash on its accounts receivable.The effects of this transaction as reflected in the accounting equation are:

Correct AnswerverifiedShow Answer

Rent expense appears on which of the following statements?

Correct AnswerverifiedShow Answer

Assets created by selling goods and services on credit are:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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None...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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