Question 1

Zion Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Accepted Answer

A)  Assets increase by $75,000 and expenses increase by $75,000.
B)  Assets increase by $75,000 and expenses decrease by $75,000.
C)  Liabilities increase by $75,000 and expenses decrease by $75,000.
D)  Assets decrease by $75,000 and expenses decrease by $75,000.
E)  Assets increase by $75,000 and liabilities increase by $75,000.F) B) and C)
G) None of the above

Question 2

Assets removed from the business by the business owner for personal use are called ____________.

Accepted Answer

The answer of Assets removed from the business by the...

Question 3

How does the objectivity principle support ethical behavior?

Accepted Answer

The objectivity principle supports ethic...

Question 4

A company's balance sheet shows: cash $24,000,accounts receivable $30,000,equipment $50,000,and equity $72,000.What is the amount of liabilities?

Accepted Answer

A)  $104,000.
B)  $76,000.
C)  $32,000.
D)  $68,000.
E)  $176,000.F) C) and D)
G) A) and E)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Risk is the uncertainty about the return we expect to earn.

Accepted Answer

A) True 
 B)False

Question 8

The three common forms of business ownership include sole proprietorship,partnership,and non-profit.

Accepted Answer

A) True 
 B)False

Question 9

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

Question 10

Assets created by selling goods and services on credit are:

Accepted Answer

A)  Accounts payable.
B)  Accounts receivable.
C)  Liabilities.
D)  Expenses.
E)  Equity.F) None of the above
G) A) and B)

Question 11

All of the following are true regarding ethics except:

Accepted Answer

A)  Ethics are beliefs that separate right from wrong.
B)  Ethics rules are often set for CPAs.
C)  Ethics do not affect the operations or outcome of a company.
D)  Are critical in accounting.
E)  Ethics can be hard to apply.F) B) and D)
G) A) and C)

Question 12

______________ activities involve using resources to research,develop,purchase,produce,distribute,and market products and services.

Accepted Answer

The answer of ______________ activities involve using resources to research,develop,purchase,produce,distribute,and...

Question 13

Objectivity means that financial information is supported by independent unbiased evidence.

Accepted Answer

A) True 
 B)False

Question 14

The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Accepted Answer

A) True 
 B)False

Question 15

Net income occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 16

The accounting concept that requires financial statement information to be supported by independent,unbiased evidence other than someone's belief or opinion is:

Accepted Answer

A)  Business entity assumption.
B)  Monetary unit assumption.
C)  Going-concern assumption.
D)  Time-period assumption.
E)  ObjectivityF) None of the above
G) A) and B)

Question 17

Harris Co.has a net income of $43,000,assets at the beginning of the year are $250,000 and assets at the end of the year are $300,000.Compute its return on assets.

Accepted Answer

A)  8.4%
B)  17.2%
C)  14.3%
D)  15.6%
E)  1.5%F) A) and B)
G) A) and C)

Question 18

Technology:

Accepted Answer

A)  Has replaced accounting.
B)  Has not changed the work that accountants do.
C)  Has closely linked accounting with consulting, planning, and other financial services.
D)  In accounting has replaced the need for decision makers.
E)  In accounting is only available to large corporations.F) B) and E)
G) C) and D)

Question 19

An income statement reports on investing and financing activities.

Accepted Answer

A) True 
 B)False

Question 20

Reston had income of $150 million and average invested assets of $1,800 million.Its return on assets is:

Accepted Answer

A)  8.3%.
B)  83.3%.
C)  12%.
D)  120%.
E)  16.7%.F) A) and B)
G) C) and D)

Exam 1: Accounting in Business

The three common forms of business ownership include sole proprietorship,partnership,and non-profit.

Correct AnswerverifiedShow Answer

Risk is the uncertainty about the return we expect to earn.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Reston had income of $150 million and average invested assets of $1,800 million.Its return on assets is:

Correct AnswerverifiedShow Answer

A company's balance sheet shows: cash $24,000,accounts receivable $30,000,equipment $50,000,and equity $72,000.What is the amount of liabilities?

Correct AnswerverifiedShow Answer

The accounting concept that requires financial statement information to be supported by independent,unbiased evidence other than someone's belief or opinion is:

Correct AnswerverifiedShow Answer

Harris Co.has a net income of $43,000,assets at the beginning of the year are $250,000 and assets at the end of the year are $300,000.Compute its return on assets.

Correct AnswerverifiedShow Answer

Objectivity means that financial information is supported by independent unbiased evidence.

Correct AnswerverifiedShow Answer

Assets removed from the business by the business owner for personal use are called ____________.

Correct AnswerverifiedShow Answer

The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Correct AnswerverifiedShow Answer

Assets created by selling goods and services on credit are:

Correct AnswerverifiedShow Answer

Technology:

Correct AnswerverifiedShow Answer

Zion Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Correct AnswerverifiedShow Answer

______________ activities involve using resources to research,develop,purchase,produce,distribute,and market products and services.

Correct AnswerverifiedShow Answer

Net income occurs when revenues exceed expenses.

Correct AnswerverifiedShow Answer

How does the objectivity principle support ethical behavior?

Correct AnswerverifiedThe objectivity principle supports ethic...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

An income statement reports on investing and financing activities.

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

All of the following are true regarding ethics except:

Correct AnswerverifiedShow Answer

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The objectivity principle supports ethic...
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