Question 1

Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA) is:

Accepted Answer

A)  3.5%.
B)  17.5%.
C)  35%.
D)  1.8%.
E)  5.7%.F) B) and D)
G) All of the above

Question 2

The going concern assumption:

Accepted Answer

A)  Means that we can express transactions and events in monetary, or money, units.
B)  Means that a business is accounted for separately from other business entities, including its owner.
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)  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 C)

Question 3

Operating activities:

Accepted Answer

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

Question 4

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 5

The balance sheet is based on the accounting equation.

Accepted Answer

A) True 
 B)False

Question 6

If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by the purchaser as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at:

Accepted Answer

A)  $140,000.
B)  $137,000.
C)  $150,000.
D)  $138,500.
E)  $95,000.F) A) and D)
G) A) and C)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Accepted Answer

A) True 
 B)False

Question 9

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

Accepted Answer

A)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000.
B)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity remains unchanged.
C)  Assets would increase $38,000 and liabilities would decrease $38,000.
D)  There would be no effect on the accounts because the accounts are affected by the same amount.
E)  Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000.F) C) and E)
G) D) and E)

Question 10

Use the following information for Meeker Corp. to determine the amount of equity to report.   Cash $70,000 Buildings 125,000 Land 205,000 Liabilities 130,000\begin{array}{lr}	ext { Cash } & \$ 70,000 \	ext { Buildings } & 125,000 \	ext { Land } & 205,000 \	ext { Liabilities } & 130,000\end{array} Cash  Buildings  Land  Liabilities ​$70,000125,000205,000130,000​

Accepted Answer

A)  $530,000.
B)  $140,000.
C)  $20,000.
D)  $270,000.
E)  $390,000. F) C) and D)
G) B) and C)

Question 11

Liabilities are the owner's claim on assets.

Accepted Answer

A) True 
 B)False

Question 12

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000, and withdrawals by the owner of $12,000. The owner made no investments during the year. Calculate the ending equity.

Accepted Answer

A)  $29,000.
B)  $(5,000) .
C)  $75,000.
D)  $5,000.
E)  $99,000.F) B) and C)
G) B) and E)

Question 13

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Accepted Answer

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

Question 14

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 15

Match between columns
                        Premises: Assess whether an organization is likely to repay its loans with interest.
Decide whether to buy, hold, or sell a company's stock.
Assess whether a company has paid all required taxes and complied with securities rules.
Know what, when, and how much to purchase.
Judge the soundness of a customer before making sales on credit.

Accepted Answer

The Answer of Purchasing Managers and Regulators and Lenders and is...

Question 16

A net loss occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 17

Another name for equity is:

Accepted Answer

A)  Expenses.
B)  Net assets.
C)  Net loss.
D)  Net income.
E)  Revenue.F) All of the above
G) B) and E)

Question 18

The income statement shows the financial position of a business on a specific date.

Accepted Answer

A) True 
 B)False

Question 19

How does the going-concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f...

Question 20

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Correct Answer
verified

Another name for equity is:

Correct Answer
verified

Liabilities are the owner's claim on assets.

Correct Answer
verified

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Correct Answer
verified

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

Correct Answer
verified

The balance sheet is based on the accounting equation.

Correct Answer
verified

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

Correct Answer
verified

A net loss occurs when revenues exceed expenses.

Correct Answer
verified

Correct Answer
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The going concern assumption:

Correct Answer
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Operating activities:

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

Correct Answer
verified

How does the going-concern principle affect reporting asset values of a business?

Correct Answer
verified
The going-concern principle means that f...
View Answer

Use the following information for Meeker Corp. to determine the amount of equity to report. $\begin{array}{lr}\text { Cash } & \$ 70,000 \\\text { Buildings } & 125,000 \\\text { Land } & 205,000 \\\text { Liabilities } & 130,000\end{array}$

Correct Answer
verified

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Correct Answer
verified

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000, and withdrawals by the owner of $12,000. The owner made no investments during the year. Calculate the ending equity.

Correct Answer
verified

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Correct Answer
verified

Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA) is:

Correct Answer
verified

The income statement shows the financial position of a business on a specific date.

Correct Answer
verified

The following is a list of selected users of accounting information. Match accounting information with the appropriate user to the following decisions they make .

Exam 1: Accounting in Business

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Correct AnswerverifiedShow Answer

Another name for equity is:

Correct AnswerverifiedShow Answer

Liabilities are the owner's claim on assets.

Correct AnswerverifiedShow Answer

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Correct AnswerverifiedShow Answer

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

Correct AnswerverifiedShow Answer

The balance sheet is based on the accounting equation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A net loss occurs when revenues exceed expenses.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The going concern assumption:

Correct AnswerverifiedShow Answer

Operating activities:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

How does the going-concern principle affect reporting asset values of a business?

Correct AnswerverifiedThe going-concern principle means that f...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Correct AnswerverifiedShow Answer

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000, and withdrawals by the owner of $12,000. The owner made no investments during the year. Calculate the ending equity.

Correct AnswerverifiedShow Answer

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Correct AnswerverifiedShow Answer

Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA) is:

Correct AnswerverifiedShow Answer

The income statement shows the financial position of a business on a specific date.

Correct AnswerverifiedShow Answer

The following is a list of selected users of accounting information. Match accounting information with the appropriate user to the following decisions they make .

Correct Answer
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The going-concern principle means that f...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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