Question 1

The principle prescribing that financial statements reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

Accepted Answer

A)   Going-concern principle
B)   Business entity principle
C)   Objectivity principle
D)   Cost principle
E)   Monetary unit principleF) A) and B)
G) A) and C)

Question 2

The owners of a partnership:

Accepted Answer

A)   Have created an entity that can also be called a sole proprietorship.
B)   Have unlimited liability.
C)   Have to have a written agreement in order to be legal.
D)   Have created a legal organization separate from its owners.
E)   Are called shareholders.F) D) and E)
G) B) and D)

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

Creditors' claims on the assets of a company are called:

Accepted Answer

A)   Net losses
B)   Expenses
C)   Revenues
D)   Equity
E)   LiabilitiesF) A) and B)
G) A) and C)

Question 5

FastForward has beginning equity of $257,000, net income of $51,000, dividends of $40,000, and investments by owners in exchange for stock of $6,000. Its ending equity is:

Accepted Answer

A)   $223,000
B)   $240,000
C)   $268,000
D)   $274,000
E)   $208,000F) C) and D)
G) All of the above

Question 6

Explain the role of accounting in the information age.

Accepted Answer

Accounting is an information and measure...

Question 7

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

Accepted Answer

A)   Income statement equation.
B)   Accounting equation.
C)   Business equation.
D)   Return on equity ratio.
E)   Net income.F) None of the above
G) All of the above

Question 8

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 equity?

Accepted Answer

A)   $17,000
B)   $29,000
C)   $71,000
D)   $88,000
E)   $105,000F) B) and D)
G) A) and E)

Question 9

The area of accounting aimed at serving the decision-making needs of internal users is:

Accepted Answer

A)   Financial accounting
B)   Managerial accounting
C)   External auditing
D)   SEC reporting
E)   Governmental accountingF) B) and E)
G) A) and D)

Question 10

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Accepted Answer

A) True 
 B)False

Question 11

The organization that attempts to create more harmony among the accounting practices of different countries by identifying preferred practices and encouraging their worldwide acceptance is the:

Accepted Answer

A)   AICPA
B)   FASB
C)   CAP
D)   SEC
E)   IASBF) B) and D)
G) C) and D)

Question 12

Discuss the relationship of risk to return.

Accepted Answer

Risk is the uncertainty about the amount...

Question 13

Which of the following statements is not true about assets?

Accepted Answer

A)   They are economic resources owned or controlled by the business.
B)   They are expected to provide future benefits to the business.
C)   They appear on the balance sheet.
D)   They appear on the statement of retained earnings.
E)   Claims on them are shared between creditors and owners.F) All of the above
G) C) and D)

Question 14

Recording the items on the financial statements in dollars is done because of the:

Accepted Answer

A)   Objectivity principle
B)   Monetary unit principle
C)   Revenue recognition principle
D)   Going-concern principle
E)   Cost principleF) A) and D)
G) None of the above

Question 15

Match between columns
                        Premises: Revenue recognition principle
Monetary unit principle
Business entity principle
Liabilities
Accounting equation
Statement of cash flows
Statement of retained earnings
Expenses
Business transaction

Accepted Answer

The Answer of A financial statement that reports the changes is...

Question 16

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 the owners' claims against assets.F) None of the above
G) B) and C)

Question 17

Fees earned (but not yet received in cash)  by a business in exchange for services that it has provided appear on which of the following statements?

Accepted Answer

A)   Income statement
B)   Statement of cash received
C)   Statement of retained earnings
D)   Statement of cash flows
E)   Schedule of accounts receivableF) B) and C)
G) A) and B)

Question 18

How does the objectivity principle support ethical behavior?

Accepted Answer

The objectivity principle supports ethic...

Question 19

If liabilities are $51,500 and assets are $173,425, then equity equals:

Accepted Answer

A)   $224,925
B)   $51,500
C)   $173,425
D)   $121,925
E)   $103,000F) A) and E)
G) A) and C)

Question 20

The accounting equation can be restated as: Assets - Equity = Liabilities.

Accepted Answer

A) True 
 B)False

Exam 1: Introducing Financial Accounting

How does the objectivity principle support ethical behavior?

Correct Answer
verified
The objectivity principle supports ethic...
View Answer

Creditors' claims on the assets of a company are called:

Correct Answer
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Recording the items on the financial statements in dollars is done because of the:

Correct Answer
verified

The owners of a partnership:

Correct Answer
verified

Explain the role of accounting in the information age.

Correct Answer
verified
Accounting is an information and measure...
View Answer

The principle prescribing that financial statements reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

Correct Answer
verified

The accounting equation can be restated as: Assets - Equity = Liabilities.

Correct Answer
verified

FastForward has beginning equity of $257,000, net income of $51,000, dividends of $40,000, and investments by owners in exchange for stock of $6,000. Its ending equity is:

Correct Answer
verified

The area of accounting aimed at serving the decision-making needs of internal users is:

Correct Answer
verified

The organization that attempts to create more harmony among the accounting practices of different countries by identifying preferred practices and encouraging their worldwide acceptance is the:

Correct Answer
verified

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 equity?

Correct Answer
verified

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Correct Answer
verified

Discuss the relationship of risk to return.

Correct Answer
verified
Risk is the uncertainty about the amount...
View Answer

Which of the following statements is not true about assets?

Correct Answer
verified

Match the following definitions with the terms. Place the number that identifies the best definition in the blank space next to the term.

Fees earned (but not yet received in cash) by a business in exchange for services that it has provided appear on which of the following statements?

Correct Answer
verified

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

Correct Answer
verified

Net income:

Correct Answer
verified

If liabilities are $51,500 and assets are $173,425, then equity equals:

Correct Answer
verified

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

Correct Answer
verified

Exam 1: Introducing Financial Accounting

How does the objectivity principle support ethical behavior?

Correct AnswerverifiedThe objectivity principle supports ethic...View AnswerShow Answer

Creditors' claims on the assets of a company are called:

Correct AnswerverifiedShow Answer

Recording the items on the financial statements in dollars is done because of the:

Correct AnswerverifiedShow Answer

The owners of a partnership:

Correct AnswerverifiedShow Answer

Explain the role of accounting in the information age.

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

The principle prescribing that financial statements reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

Correct AnswerverifiedShow Answer

The accounting equation can be restated as: Assets - Equity = Liabilities.

Correct AnswerverifiedShow Answer

FastForward has beginning equity of $257,000, net income of $51,000, dividends of $40,000, and investments by owners in exchange for stock of $6,000. Its ending equity is:

Correct AnswerverifiedShow Answer

The area of accounting aimed at serving the decision-making needs of internal users is:

Correct AnswerverifiedShow Answer

The organization that attempts to create more harmony among the accounting practices of different countries by identifying preferred practices and encouraging their worldwide acceptance is the:

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 equity?

Correct AnswerverifiedShow Answer

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Correct AnswerverifiedShow Answer

Discuss the relationship of risk to return.

Correct AnswerverifiedRisk is the uncertainty about the amount...View AnswerShow Answer

Which of the following statements is not true about assets?

Correct AnswerverifiedShow Answer

Match the following definitions with the terms. Place the number that identifies the best definition in the blank space next to the term.

Fees earned (but not yet received in cash) by a business in exchange for services that it has provided appear on which of the following statements?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Net income:

Correct AnswerverifiedShow Answer

If liabilities are $51,500 and assets are $173,425, then equity equals:

Correct AnswerverifiedShow Answer

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

Correct AnswerverifiedShow Answer

Correct Answer
verified
The objectivity principle supports ethic...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Accounting is an information and measure...
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
Risk is the uncertainty about the amount...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified