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Exam 1: Accounting in Business

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Question 1

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The ________ assumption assumes that a business will continue operating indefinitely instead of being closed or sold.

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Question 2

Multiple Choice

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The assets of a company total $700,000; the liabilities,$200,000.What is the amount of equity?

A) $900,000.
B) $700,000.
C) $500,000.
D) $200,000.
E) It is impossible to determine unless the amount of the stock issuances is known.

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

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Question 3

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The balance sheet is based on the accounting equation.

Identify the users and uses of accounting information.

An exchange of value between two entities that yields a change in the accounting equation is called:

Charlie's Chocolates' had stock issuances of $50,000 and dividends of $20,000.The company has revenues of $83,000 and expenses of $64,000.Calculate its net income.

Distributions of cash or other resources by a business to its stockholders:

Explain the role of accounting in the information age.

Management is not responsible for implementing internal controls and does not need to issue a report on internal controls.

On May 31 of the current year,the assets and liabilities of Riser,Inc.are as follows: Cash $20,500; Accounts Receivable,$7,250; Supplies,$650; Equipment,$12,000; Accounts Payable,$9,300.What is the amount of stockholders' equity as of May 31 of the current year?

A partnership must pay an additional business income tax.

The cost-benefit constraint says that information disclosed must have benefits to the user that are greater than the costs of providing it.

There are three major types of business activities.________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.

An income statement reports on investing and financing activities.

The monetary unit assumption:

Prepare a December 31 balance sheet in proper form for Smokey River Supplies from the following list of the accounts:

Match each of the following items 1 through 8 with the financial statement a through d in which each item would most likely appear.An item may appear on more than one statement.

Assets are the resources a company owns or controls that are expected to yield future benefits.

Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (or Dodd-Frank) .Which of the following are two of the important provisions of Dodd-Frank?

Zippy had cash inflows from operations of $60,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was: