Question 1

The Sarbanes-Oxley Act (SOX)does not require public companies to apply both accounting oversight and stringent internal controls.

Accepted Answer

A) True 
 B)False

Question 2

Owners of a corporation are called shareholders or stockholders.

Accepted Answer

A) True 
 B)False

Question 3

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Accepted Answer

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

Question 4

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was:

Accepted Answer

A)  $40,500 increase.
B)  $40,500 decrease.
C)  $134,500 decrease.
D)  $134,000 increase.
E)  $9,500 increase.F) A) and B)
G) B) and D)

Question 5

Explain the role of accounting in the information age.

Accepted Answer

Accounting is an information and measure...

Question 6

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) D) and E)

Question 7

A ____________________ is a business that is owned by only one person.

Accepted Answer

The answer of A ____________________ is a business that is...

Question 8

An owner's investment in a business always creates an asset (cash),a liability (note payable),and owner's equity (investment.)

Accepted Answer

A) True 
 B)False

Question 9

Revenue is properly recognized:

Accepted Answer

A)  When the customer's order is received.
B)  Only if the transaction creates an account receivable.
C)  At the end of the accounting period.
D)  Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price.
E)  When cash from a sale is received.F) C) and D)
G) None of the above

Question 10

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) A) and D)
G) A) and C)

Question 11

A financial statement providing information that helps users understand a company's financial status,and which lists the types and amounts of assets,liabilities,and equity as of a specific date,is called a(n) :

Accepted Answer

A)  Balance sheet.
B)  Income statement.
C)  Statement of cash flows.
D)  Statement of owner's equity.
E)  Financial Status Statement.F) A) and C)
G) A) and B)

Question 12

The _______________ assumption requires that financial information is supported by independent,unbiased evidence.

Accepted Answer

The answer of The _______________ assumption requires that financial information...

Question 13

The Maxim Company acquired a building for $500,000.Maxim had the building appraised,and found that the building was easily worth $575,000.The seller had paid $300,000 for the building 6 years ago.Which accounting principle would require Maxim to record the building on its records at $500,000?

Accepted Answer

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

Question 14

Identify the three basic forms of business organizations.

Accepted Answer

The three basic forms of busin...

Question 15

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Accepted Answer

A) True 
 B)False

Question 16

Describe the three important guidelines for revenue recognition.

Accepted Answer

The three important guidelines for reven...

Question 17

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Accepted Answer

A) True 
 B)False

Question 18

Regulators often have legal authority over certain activities of organizations.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Correct AnswerverifiedShow Answer

An owner's investment in a business always creates an asset (cash),a liability (note payable),and owner's equity (investment.)

Correct AnswerverifiedShow Answer

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Correct AnswerverifiedShow Answer

Regulators often have legal authority over certain activities of organizations.

Correct AnswerverifiedShow Answer

The _______________ assumption requires that financial information is supported by independent,unbiased evidence.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act (SOX)does not require public companies to apply both accounting oversight and stringent internal controls.

Correct AnswerverifiedShow Answer

Describe the three important guidelines for revenue recognition.

Correct AnswerverifiedThe three important guidelines for reven...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The Maxim Company acquired a building for $500,000.Maxim had the building appraised,and found that the building was easily worth $575,000.The seller had paid $300,000 for the building 6 years ago.Which accounting principle would require Maxim to record the building on its records at $500,000?

Correct AnswerverifiedShow Answer

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was:

Correct AnswerverifiedShow Answer

Revenue is properly recognized:

Correct AnswerverifiedShow Answer

Explain the role of accounting in the information age.

Correct AnswerverifiedAccounting is an information and measure...View AnswerShow Answer

An example of a financing activity is:

Correct AnswerverifiedShow Answer

A financial statement providing information that helps users understand a company's financial status,and which lists the types and amounts of assets,liabilities,and equity as of a specific date,is called a(n) :

Correct AnswerverifiedShow Answer

A ____________________ is a business that is owned by only one person.

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

Correct AnswerverifiedShow Answer

Owners of a corporation are called shareholders or stockholders.

Correct AnswerverifiedShow Answer

Identify the three basic forms of business organizations.

Correct AnswerverifiedThe three basic forms of busin...View AnswerShow Answer

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Correct AnswerverifiedShow Answer

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The three important guidelines for reven...
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Accounting is an information and measure...
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The three basic forms of busin...
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