Question 1

The primary objective of managerial 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 2

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit.How does this transaction affect the accounting equation for Atkins?

Accepted Answer

A)  Assets would decrease $1,750 and liabilities would decrease $1,750.
B)  One asset would increase $1,750 and a different asset would decrease $1,750,causing no effect.
C)  Assets would increase $1,750 and equity would increase $1,750.
D)  Assets would increase $1,750 and liabilities would increase $1,750.
E)  Liabilities would decrease $1,750 and equity would increase $1,750.F) B) and E)
G) A) and B)

Question 3

The records of Roadmaster Auto Rentals show the following information as of December 31.The owner,Rob Fletcher withdrew $52,000 during the year for personal expenses.Prepare a December income statement,a December statement of owner's equity,and a December 30 balance sheet.

Accepted Answer

The answer of The records of Roadmaster Auto Rentals show...

Question 4

If assets are $99,000 and liabilities are $32,000,then equity equals:

Accepted Answer

A)  $32,000.
B)  $67,000.
C)  $99,000.
D)  $131,000.
E)  $198,000.F) A) and D)
G) A) and E)

Question 5

In accounting,the rule that requires that assets,services,and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ______________________________.

Accepted Answer

The answer of In accounting,the rule that requires that assets,services,and...

Question 6

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Accepted Answer

A)  Increased $22,000.
B)  Decreased $22,000.
C)  Increased $89,000.
D)  Decreased $156,000.
E)  Increased $156,000.F) B) and C)
G) A) and B)

Question 7

Savvy Sightseeing 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) B) and E)

Question 8

A disadvantage of a sole proprietorship is the fact that the owner has ______________.

Accepted Answer

The answer of A disadvantage of a sole proprietorship is...

Question 9

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

Accepted Answer

A) True 
 B)False

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 C)
G) B) and C)

Question 11

Return on assets is often stated in ratio form as the amount of average total assets divided by income.

Accepted Answer

A) True 
 B)False

Question 12

External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 13

A company's balance sheet shows: cash $24,000,accounts receivable $30,000,equipment $50,000,and equity $72,000.What is the amount of liabilities?

Accepted Answer

A)  $104,000.
B)  $76,000.
C)  $32,000.
D)  $68,000.
E)  $176,000.F) A) and E)
G) B) and D)

Question 14

A net loss occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 15

If assets are $300,000 and liabilities are $192,000,then equity equals:

Accepted Answer

A)  $108,000.
B)  $192,000.
C)  $300,000.
D)  $492,000.
E)  $792,000.F) C) and E)
G) B) and C)

Question 16

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

Accepted Answer

A) True 
 B)False

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) None of the above
G) A) and D)

Question 18

Rushing had income of $150 million and average invested assets of $1,800 million.Its return on assets is:

Accepted Answer

A)  8.3%.
B)  83.3%.
C)  12%.
D)  120%.
E)  16.7%.F) C) and D)
G) None of the above

Question 19

Increases in equity from a company's sales of products or services are:

Accepted Answer

A)  Assets.
B)  Revenues.
C)  Liabilities.
D)  Owner's Equity.
E)  Expenses.F) A) and B)
G) B) and C)

Question 20

The basic financial statements include all of the following except:

Accepted Answer

A)  Balance Sheet.
B)  Income Statement.
C)  Statement of Owner's Equity.
D)  Statement of Cash Flows.
E)  Statement of Changes in Assets.F) A) and B)
G) B) and D)

Exam 1: Accounting in Business

If assets are $300,000 and liabilities are $192,000,then equity equals:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Rushing had income of $150 million and average invested assets of $1,800 million.Its return on assets is:

Correct AnswerverifiedShow Answer

A company's balance sheet shows: cash $24,000,accounts receivable $30,000,equipment $50,000,and equity $72,000.What is the amount of liabilities?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The records of Roadmaster Auto Rentals show the following information as of December 31.The owner,Rob Fletcher withdrew $52,000 during the year for personal expenses.Prepare a December income statement,a December statement of owner's equity,and a December 30 balance sheet.

Correct AnswerverifiedShow Answer

External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.

Correct AnswerverifiedShow Answer

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit.How does this transaction affect the accounting equation for Atkins?

Correct AnswerverifiedShow Answer

An example of a financing activity is:

Correct AnswerverifiedShow Answer

The basic financial statements include all of the following except:

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

Increases in equity from a company's sales of products or services are:

Correct AnswerverifiedShow Answer

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Correct AnswerverifiedShow Answer

A net loss occurs when revenues exceed expenses.

Correct AnswerverifiedShow Answer

If assets are $99,000 and liabilities are $32,000,then equity equals:

Correct AnswerverifiedShow Answer

A disadvantage of a sole proprietorship is the fact that the owner has ______________.

Correct AnswerverifiedShow Answer

Return on assets is often stated in ratio form as the amount of average total assets divided by income.

Correct AnswerverifiedShow Answer

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

Correct AnswerverifiedShow Answer

Savvy Sightseeing 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

In accounting,the rule that requires that assets,services,and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ______________________________.

Correct AnswerverifiedShow Answer

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