Question 1

The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity,pressure,and rationalization.

Accepted Answer

A) True 
 B)False

Question 2

Understanding generally accepted accounting principles is not necessary to effectively use and interpret financial statements.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Accepted Answer

A)   Total revenues of $80,000 and total expenses of $60,000.
B)   Total revenues of $170,000 and total expenses of $150,000.
C)   Total revenues of $60,000 and total expenses of $40,000.
D)   Total revenues of $70,000 and total expenses of $60,000.
E)   Total revenues of $40,000 and total expenses of $20,000.F) All of the above
G) A) and B)

Question 4

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

Accepted Answer

A)   The accounting equation.
B)   Recordkeeping or bookkeeping.
C)   An external transaction.
D)   An asset.
E)   Net Income.F) A) and B)
G) All of the above

Question 5

The rule that requires financial statements to 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 assumption.
B)   Business entity assumption.
C)   Objectivity principle.
D)   Measurement (Cost)  Principle.
E)   Monetary unit assumption.F) B) and E)
G) C) and E)

Question 6

Return on assets is useful in evaluating management,analyzing and forecasting profits,and planning activities.

Accepted Answer

A) True 
 B)False

Question 7

Match the following terms with the appropriate definition.
-The area of accounting that serves the decision-making needs of internal users.

Accepted Answer

A)  Internal users
B)  Fraud triangle
C)  Managerial accounting
D)  Ethics
E)  External usersF) Certified Public Accountant (CP
A)  G) Financial accountingH) AccountingI) RecordkeepingJ) D) and H)
K) B) and D)

Question 8

The accounting equation is ________.

Accepted Answer

Assets = L...

Question 9

________ are the increases in equity from a company's sales of products and services to customers.

Accepted Answer

The answer of ________ are the increases in equity from...

Question 10

The time period assumption:

Accepted Answer

A)   Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
B)   Means that we can express transactions and events in monetary, or money, units.
C)   Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods.
D)   Means that a business is accounted for separately from other business entities, including its owners.
E)   Prescribes that a company record the expenses it incurred to generate the revenue reported.F) None of the above
G) B) and C)

Question 11

The revenue recognition principle:

Accepted Answer

A)   Prescribes that accounting information is based on actual cost.
B)   Provides guidance on when a company must recognize revenue.
C)   Prescribes that a company report the details behind financial statements that would impact users' decisions.
D)   Prescribes that a company record the expenses it incurred to generate the revenue reported.
E)   Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.F) A) and D)
G) A) and E)

Question 12

Risk is the ________ about the return an investor expects to earn.

Accepted Answer

The answer of Risk is the ________ about the return...

Question 13

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

Accepted Answer

A)   An increase of $80,000.
B)   A decrease of $80,000.
C)   An increase of $30,000.
D)   A decrease of $30,000.
E)   An increase of $25,000.F) A) and B)
G) C) and D)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Identify the risk and the return in each of the following examples.
a.Investing $500 in a certificate of deposit 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

a.The risk involved is that the investor...

Question 16

Soo Lin began an Internet Consulting practice and completed these transactions during April of the current year:
  
Show the effects of the above transactions on the accounting equation of Soo Lin,Consultant.Use the following format for your answers.The first item is shown as an example.
Increase = I Decrease = D No effect = N
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Date } & \text { Assets } & \text { Liabilities } & \text { Equity } \
\hline \text { Example: } & & & \
\hline \text { April 1 } & \text { I } & \text { N } & \text { I } \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | c | c | c | c | }
\...

Question 17

Match the following terms with the appropriate definition.
-IASB

Accepted Answer

A)  The governmental agency that has the legal authority to establish accounting rules.
B)  Prescribes that assets and services to be recorded initially on a cash or equal-to-cash basis.
C)  A report that describes a company's financial position at a point in time.
D)  A financial statement that reports the changes in equity over the reporting period; including increases from net income and decreases from dividends or net losses.
E)  The concepts and rules that govern financial accounting.F) A report that identifies cash receipts and cash payments over a period of time.G) A principle that requires the information in financial statements to be supported by independent unbiased evidence.H) An independent group consisting of individuals from many countries that identify preferred accounting practices.I) Presumes that the life of a company can be divided into periods for reporting purposes.J) Prescribes that a company report the details behind financial statements that would impact user decisions.K) A) and H)
L) B) and E)

Question 18

There are at least three types of partnerships that limit the partners' liability.They are 1)________,2)________,and 3)________.

Accepted Answer

answers c...

Question 19

Operating activities:

Accepted Answer

A)   Are the means organizations use to pay for resources like land, buildings and equipment.
B)   Involve using resources to research, develop, purchase, produce, distribute and market products and services.
C)   Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services.
D)   Are also called asset management.
E)   Are also called strategic management.F) C) and D)
G) All of the above

Question 20

Every business transaction leaves the accounting equation in balance.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

Match the following terms with the appropriate definition. -IASB

Correct Answer
verified

There are at least three types of partnerships that limit the partners' liability.They are 1),2),and 3).

Correct Answer
verified
answers c...
View Answer

________ are the increases in equity from a company's sales of products and services to customers.

Correct Answer
verified

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

Correct Answer
verified

Return on assets is useful in evaluating management,analyzing and forecasting profits,and planning activities.

Correct Answer
verified

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Correct Answer
verified

Identify the risk and the return in each of the following examples. a.Investing $500 in a certificate of deposit 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 Answer
verified
a.The risk involved is that the investor...
View Answer

Match the following terms with the appropriate definition. -The area of accounting that serves the decision-making needs of internal users.

Correct Answer
verified

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

Correct Answer
verified

The revenue recognition principle:

Correct Answer
verified

Every business transaction leaves the accounting equation in balance.

Correct Answer
verified

The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity,pressure,and rationalization.

Correct Answer
verified

Operating activities:

Correct Answer
verified

The accounting equation is ________.

Correct Answer
verified
Assets = L...
View Answer

Understanding generally accepted accounting principles is not necessary to effectively use and interpret financial statements.

Correct Answer
verified

Risk is the ________ about the return an investor expects to earn.

Correct Answer
verified

The rule that requires financial statements to 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

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

Correct Answer
verified

Correct Answer
verified
\[\begin{array} { | c | c | c | c | }
\...
View Answer

The time period assumption:

Correct Answer
verified

Exam 1: Accounting in Business

Match the following terms with the appropriate definition. -IASB

Correct AnswerverifiedShow Answer

There are at least three types of partnerships that limit the partners' liability.They are 1)________,2)________,and 3)________.

Correct Answerverified answers c...View AnswerShow Answer

________ are the increases in equity from a company's sales of products and services to customers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Return on assets is useful in evaluating management,analyzing and forecasting profits,and planning activities.

Correct AnswerverifiedShow Answer

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Correct AnswerverifiedShow Answer

Identify the risk and the return in each of the following examples. a.Investing $500 in a certificate of deposit 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 Answerverifieda.The risk involved is that the investor...View AnswerShow Answer

Match the following terms with the appropriate definition. -The area of accounting that serves the decision-making needs of internal users.

Correct AnswerverifiedShow Answer

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

Correct AnswerverifiedShow Answer

The revenue recognition principle:

Correct AnswerverifiedShow Answer

Every business transaction leaves the accounting equation in balance.

Correct AnswerverifiedShow Answer

The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity,pressure,and rationalization.

Correct AnswerverifiedShow Answer

Operating activities:

Correct AnswerverifiedShow Answer

The accounting equation is ________.

Correct AnswerverifiedAssets = L...View AnswerShow Answer

Understanding generally accepted accounting principles is not necessary to effectively use and interpret financial statements.

Correct AnswerverifiedShow Answer

Risk is the ________ about the return an investor expects to earn.

Correct AnswerverifiedShow Answer

The rule that requires financial statements to 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

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

Correct AnswerverifiedShow Answer

Correct Answerverified\[\begin{array} { | c | c | c | c | } \...View AnswerShow Answer

The time period assumption:

Correct AnswerverifiedShow Answer

Correct Answer
verified

There are at least three types of partnerships that limit the partners' liability.They are 1),2),and 3).

Correct Answer
verified
answers c...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a.The risk involved is that the investor...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Assets = L...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
\[\begin{array} { | c | c | c | c | }
\...
View Answer

Correct Answer
verified