Question 1

Explain the accounting equation, and define its terms.

Accepted Answer

The accounting equation is stated as: As...

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The International Accounting Standards board (IASB) has the authority to impose its standards on companies around the world.

Accepted Answer

A) True 
 B)False

Question 4

If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity?

Accepted Answer

A)   Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000.
B)   Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000.
C)   Assets would decrease $38,000, liabilities would decrease $38,000, and equity would not change.
D)   There would be no effect on the accounts because the accounts are affected by the same amount.
E)   None of these.F) A) and D)
G) A) and C)

Question 5

Ethical behavior requires:

Accepted Answer

A)   That auditors' pay not depend on the success of the client's business.
B)   Auditors to invest in businesses they audit.
C)   Analysts to report information favorable to their companies.
D)   Managers to use accounting information to benefit themselves.
E)   That auditors' pay depend on the success of the client's business.F) B) and E)
G) B) and D)

Question 6

_________ are beliefs that separate right from wrong.

Accepted Answer

The answer of _________ are beliefs that separate right from...

Question 7

Identify the risk and the return in each of the following examples.
a. Investing $500 in a CD at 4.5% interest.
b. Placing a $100 bet on an NBA game.
c. Investing $10,000 in Microsoft stock.
d. Borrowing $20,000 in student loans.

Accepted Answer

The answer of Identify the risk and the return in...

Question 8

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:

Accepted Answer

A)   Decreased $105,000.
B)   Decreased $45,000.
C)   Increased $30,000.
D)   Increased $45,000.
E)   Increased $105,000.F) A) and B)
G) C) and D)

Question 9

Cool Tours had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Accepted Answer

A)   $88,000.
B)   $25,000.
C)   $97,000.
D)   $38,000.
E)   $47,000.F) B) and D)
G) All of the above

Question 10

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) A) and E)
G) A) and C)

Question 11

The statement of owner's equity:

Accepted Answer

A)   Reports how equity changes at a point in time.
B)   Reports how equity changes over a period of time.
C)   Reports on cash flows for operating, financing, and investing activities over a period of time.
D)   Reports on cash flows for operating, financing, and investing activities at a point in time.
E)   Reports on amounts for assets, liabilities, and equity at a point in time.F) A) and D)
G) All of the above

Question 12

The ____________________ describes a company's revenues and expenses over a period of time due to earnings activities.

Accepted Answer

The answer of The ____________________ describes a company's revenues and...

Question 13

The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Accepted Answer

A) True 
 B)False

Question 14

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 15

________________ 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 16

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

Question 17

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) B) and D)
G) B) and C)

Question 18

A common characteristic of __________ is their ability to provide expected future benefits to a business.

Accepted Answer

The answer of A common characteristic of __________ is their...

Question 19

Data for Madison Realty are as follows:  The owner, Mary Madison, withdrew a total of $30,000 for personal use during the year. Using the above data, prepare Madison Realty's Statement of Owner's Equity for the year ended December 31.

Accepted Answer

The answer of Data for Madison Realty are as follows:...

Question 20

The three major types of business activities are operating, financing, and investing.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:

Correct AnswerverifiedShow Answer

Explain the accounting equation, and define its terms.

Correct AnswerverifiedThe accounting equation is stated as: As...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and 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 three major types of business activities are operating, financing, and investing.

Correct AnswerverifiedShow Answer

The International Accounting Standards board (IASB) has the authority to impose its standards on companies around the world.

Correct AnswerverifiedShow Answer

The statement of owner's equity:

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

Ethical behavior requires:

Correct AnswerverifiedShow Answer

The ____________________ describes a company's revenues and expenses over a period of time due to earnings activities.

Correct AnswerverifiedShow Answer

Data for Madison Realty are as follows: The owner, Mary Madison, withdrew a total of $30,000 for personal use during the year. Using the above data, prepare Madison Realty's Statement of Owner's Equity for the year ended December 31.

Correct AnswerverifiedShow Answer

Cool Tours had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Correct AnswerverifiedShow Answer

The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Correct AnswerverifiedShow Answer

Identify the risk and the return in each of the following examples. a. Investing $500 in a CD at 4.5% interest. b. Placing a $100 bet on an NBA game. c. Investing $10,000 in Microsoft stock. d. Borrowing $20,000 in student loans.

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

_________ are beliefs that separate right from wrong.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A common characteristic of __________ is their ability to provide expected future benefits to a business.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The accounting equation is stated as: As...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified