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Exam 1: Accounting in Business

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Question 41

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If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period, what was the effect on the assets?

A) Assets would have increased $55,000.
B) Assets would have decreased $55,000.
C) Assets would have increased $19,000.
D) Assets would have decreased $19,000.
E) None of these.

F) C) and E)
G) A) and D)

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Question 42

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Annie's Attic has the following account balances for the dates given: Also, its net income, for September 1 through September 30 was $20,000 and there were no investments or withdrawals by the owner. Determine the equity at both September 1 and September 30.

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At September 1:
Assets = Liab...

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Question 43

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The following is a list of selected users of accounting information. Match the appropriate user to the following information needs.

A sole proprietorship is a business owned by one or more persons.

Owner financing refers to resources contributed by creditors or lenders.

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

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have:

Describe the three important guidelines for revenue recognition.

A company borrows $125,000 from the Eastside Bank and receives the loan proceeds in cash. This represents a(n) :

Strategic management is the process of determining the right mix of operating activities for the type of organization, its plans, and its markets.

Prepare a November 30 balance sheet in proper form for Green Bay Delivery Service from the following alphabetical list of the accounts at November 30:

Accounts payable appear on which of the following statements?

Return on assets reflects the effectiveness of a company's ability to generate profit through productive use of its assets.

U. S. Government Treasury bonds provide high return and low risk to investors.

According to the cost principle, it is preferable for managers to report an estimate of an asset's value.

If a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000, the land account transaction amount to handle the sale of the land in the seller's books is:

Net Income:

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

An owner's investment in a business always creates an asset (cash), a liability (note payable), and owner's equity (investment.)

Internal users include lenders, shareholders, brokers and managers.