Question 1

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 2

A limited partnership:

Accepted Answer

A)  Includes a general partner with unlimited liability.
B)  Is subject to double taxation.
C)  Has owners called stockholders.
D)  Is the same as a corporation.
E)  May only have two partners.F) A) and E)
G) A) and D)

Question 3

Net Income:

Accepted Answer

A)  Decreases equity.
B)  Represents the amount of assets owners put into a business.
C)  Equals assets minus liabilities.
D)  Is the excess of revenues over expenses.
E)  Represents owners' claims against assets.F) B) and E)
G) A) and B)

Question 4

Another name for equity is:

Accepted Answer

A)  Net income.
B)  Expenses.
C)  Net assets.
D)  Revenue.
E)  Net loss.F) B) and C)
G) A) and E)

Question 5

Alpha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Accepted Answer

A)  Assets increase by $75,000 and expenses increase by $75,000.
B)  Assets increase by $75,000 and expenses decrease by $75,000.
C)  Liabilities increase by $75,000 and expenses decrease by $75,000.
D)  Assets decrease by $75,000 and expenses decrease by $75,000.
E)  Assets increase by $75,000 and liabilities increase by $75,000.F) A) and E)
G) B) and D)

Question 6

______________ is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

Accepted Answer

Financial ...

Question 7

A balance sheet lists:

Accepted Answer

A)  The types and amounts of the revenues and expenses of a business.
B)  Only the information about what happened to equity during a time period.
C)  The types and amounts of assets,liabilities,and equity of a business as of a specific date.
D)  The inflows and outflows of cash during the period.
E)  The assets and liabilities of a company but not the owner's equity.F) D) and E)
G) B) and E)

Question 8

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Accepted Answer

A) True 
 B)False

Question 9

The statement of cash flows identifies cash flows separated into operating,investing,and financing activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 10

Objectivity means that financial information is supported by independent,unbiased evidence.

Accepted Answer

A) True 
 B)False

Question 11

______________________,which is one part of accounting,is the recording of transactions and events,either manually or electronically.

Accepted Answer

Record-kee...

Question 12

There are three major types of business activities.________________ activities are the means organizations use to pay for resources such as land,building,and equipment to carry out plans.

Accepted Answer

The answer of There are three major types of business...

Question 13

A partnership is a business owned by two or more people.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

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

Question 15

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.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) None of the above
G) B) and C)

Question 16

Bookkeeping is the recording of transactions and events and is only part of accounting.

Accepted Answer

A) True 
 B)False

Question 17

The accounting concept that requires financial statement information to be supported by independent,unbiased evidence is:

Accepted Answer

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

Question 18

Billington Corp.borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

Accepted Answer

A)  Assets would decrease $80,000 and liabilities would decrease $80,000.
B)  Assets would decrease $80,000 and equity would increase $80,000.
C)  Assets would increase $80,000 and equity would decrease $80,000.
D)  Assets would increase $80,000 and liabilities would increase $80,000.
E)  Liabilities would decrease $80,000 and equity would increase $80,000.F) A) and B)
G) B) and D)

Question 19

Risk is:

Accepted Answer

A)  Net income divided by average total assets.
B)  The reward for investment.
C)  The uncertainty about the return expected to be earned.
D)  Unrelated to return expected.
E)  Derived from the idea of getting something back from an investment.F) All of the above
G) D) and E)

Question 20

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

Exam 1: Accounting in Business

Net Income:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

______________ is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

Correct AnswerverifiedFinancial ...View AnswerShow Answer

A balance sheet lists:

Correct AnswerverifiedShow Answer

Another name for equity is:

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The accounting concept that requires financial statement information to be supported by independent,unbiased evidence is:

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

The statement of cash flows identifies cash flows separated into operating,investing,and financing activities over a period of time.

Correct AnswerverifiedShow Answer

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.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Correct AnswerverifiedShow Answer

Bookkeeping is the recording of transactions and events and is only part of accounting.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Objectivity means that financial information is supported by independent,unbiased evidence.

Correct AnswerverifiedShow Answer

______________________,which is one part of accounting,is the recording of transactions and events,either manually or electronically.

Correct AnswerverifiedRecord-kee...View AnswerShow Answer

Risk is:

Correct AnswerverifiedShow Answer

Billington Corp.borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

Correct AnswerverifiedShow Answer

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Correct AnswerverifiedShow Answer

A limited partnership:

Correct AnswerverifiedShow Answer

Alpha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Correct AnswerverifiedShow Answer

There are three major types of business activities.________________ activities are the means organizations use to pay for resources such as land,building,and equipment to carry out plans.

Correct AnswerverifiedShow Answer

A partnership is a business owned by two or more people.

Correct AnswerverifiedShow Answer

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Financial ...
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Record-kee...
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