Question 1

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Accepted Answer

A)  Going-concern assumption.
B)  Matching principle.
C)  Cost principle.
D)  Business entity assumption.
E)  Consideration assumption.F) C) and E)
G) B) and C)

Question 2

____________ 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 3

There are at least three types of partnerships that limit the partners' liability. They are 1) _____________________, 2) ___________________, and 3) ______________________.
Answers can appear in any order

Accepted Answer

limited partnership;...

Question 4

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Accepted Answer

A) True 
 B)False

Question 5

The financial statement that shows the beginning balance of retained earnings; the changes in retained earnings that resulted from, net income (or net loss) ; dividends; and the ending balance, is the:

Accepted Answer

A)  Statement of financial position.
B)  Statement of cash flows.
C)  Balance sheet.
D)  Income statement.
E)  Statement of retained earnings.F) A) and E)
G) B) and D)

Question 6

Every business transaction leaves the accounting equation in balance.

Accepted Answer

A) True 
 B)False

Question 7

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Accepted Answer

A) True 
 B)False

Question 8

The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.

Accepted Answer

A) True 
 B)False

Question 9

A partnership is a business owned by two or more people.

Accepted Answer

A) True 
 B)False

Question 10

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Accepted Answer

The income statement describes a company...

Question 11

_________________ is net income divided by average total assets.

Accepted Answer

The answer of _________________ is net income divided by average...

Question 12

A balance sheet covers activities over a period of time such as a month or year.

Accepted Answer

A) True 
 B)False

Question 13

If a company has excess space in its building that it rents to another company for $700, what is the effect on the accounting equation when the first rent payment is collected?

Accepted Answer

A)  Assets would decrease $700 and liabilities would decrease $700.
B)  Assets would decrease $700 and equity would increase $700.
C)  Assets would increase $700 and equity would decrease $700.
D)  Assets would increase $700 and equity would increase $700.
E)  Liabilities would decrease $700 and equity would increase $700.F) A) and E)
G) C) and D)

Question 14

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Accepted Answer

A)  Assets increase $4,500 and liabilities decrease $4,500.
B)  Equity decreases $4,500 and liabilities increase $4,500.
C)  Liabilities decrease $4,500 and assets increase $4,500.
D)  Assets increase $4,500 and liabilities increase $4,500.
E)  Equity increases $4,500 and liabilities decrease $4,500.F) B) and C)
G) A) and E)

Question 15

The primary objective of financial accounting is to:

Accepted Answer

A)  Serve the decision-making needs of internal users.
B)  Provide accounting information that serves external users.
C)  Monitor and control company activities.
D)  Provide information on both the costs and benefits of looking after products and services.
E)  Know what, when, and how much product to produce.F) B) and C)
G) A) and E)

Question 16

Return on assets is also known as return on investment.

Accepted Answer

A) True 
 B)False

Question 17

Explain the role of accounting in the information age.

Accepted Answer

Accounting is an information and measure...

Question 18

Internal users include lenders, shareholders, brokers and managers.

Accepted Answer

A) True 
 B)False

Question 19

Owners of a corporation are called shareholders or stockholders.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 1: Accounting in Business

A balance sheet covers activities over a period of time such as a month or year.

Correct AnswerverifiedShow Answer

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Correct AnswerverifiedThe income statement describes a company...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Owners of a corporation are called shareholders or stockholders.

Correct AnswerverifiedShow Answer

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Correct AnswerverifiedShow Answer

Internal users include lenders, shareholders, brokers and managers.

Correct AnswerverifiedShow Answer

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Correct AnswerverifiedShow Answer

A partnership is a business owned by two or more people.

Correct AnswerverifiedShow Answer

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Correct AnswerverifiedShow Answer

If a company has excess space in its building that it rents to another company for $700, what is the effect on the accounting equation when the first rent payment is collected?

Correct AnswerverifiedShow Answer

There are at least three types of partnerships that limit the partners' liability. They are 1) _____________________, 2) ___________________, and 3) ______________________. Answers can appear in any order

Correct Answerverifiedlimited partnership;...View AnswerShow Answer

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Correct AnswerverifiedShow Answer

The financial statement that shows the beginning balance of retained earnings; the changes in retained earnings that resulted from, net income (or net loss) ; dividends; and the ending balance, is the:

Correct AnswerverifiedShow Answer

_________________ is net income divided by average total assets.

Correct AnswerverifiedShow Answer

Explain the role of accounting in the information age.

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

Return on assets is also known as return on investment.

Correct AnswerverifiedShow Answer

Every business transaction leaves the accounting equation in balance.

Correct AnswerverifiedShow Answer

The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.

Correct AnswerverifiedShow Answer

An example of a financing activity is:

Correct AnswerverifiedShow Answer

The primary objective of financial accounting is to:

Correct AnswerverifiedShow Answer

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The income statement describes a company...
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There are at least three types of partnerships that limit the partners' liability. They are 1) ___________, 2) _, and 3) ______________. Answers can appear in any order

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limited partnership;...
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Accounting is an information and measure...
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