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Exam 1: Accounting in Business

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Question 101

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The ________ describes a company's revenues and expenses along with the resulting net income or net loss over a period of time due to earnings activities.

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verified

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Question 102

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

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B) False

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Question 103

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Match the following terms with the appropriate definition. -Revenue recognition principle

Data for Kennedy Realty are as follows: $\begin{array} { l r } \text { Total assets at January 1 } & \$ 100,000 \\\text { Total liabilities at January 1 } & 35,000 \\\text { Common stock at January 1 } & 50,000 \\\text { Total revenues for the year } & 79,000 \\\text { Total expenses for the year } & 47,000\end{array}$ Cash dividends of $30,000 were paid to its sole stockholder,Finn Kennedy,during the year.No stock was issued during the year.Using the above data,prepare Kennedy Realty's Statement of Retained Earnings for the year ended December 31.

At the beginning of the period,a company had $350,000 worth of assets,$110,000 worth of liabilities,and $240,000 worth of equity.Assume the only change during the period was a $30,000 purchase of equipment by issuing a note payable.Show the accounting equation with the appropriate amounts at the end of the period.

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

The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash,and (3) measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services,is called the:

The accounting concept that requires financial statement information to be supported by independent,unbiased evidence is:

The Sarbanes-Oxley Act (SOX)does not require public companies to apply both accounting oversight and stringent internal controls.

Risk is:

Determine the net income of a company for which the following information is available for the month of July. $\begin{array}{llr} \text { Employee salaries expense} &\$180,000\\ \text {Interest expense } &10,000\\ \text { Rent expense } &20,000\\ \text { Consulting revenue } &400,000\\\end{array}$

Doc's Ribhouse had beginning equity of $52,000; net income of $35,000,and dividends of $12,000.There were no stockholder investments during the year.Calculate the ending equity.

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?

Objectivity means that financial information is supported by independent,unbiased evidence; it demands more than a person's opinion.

A common characteristic of ________ is their ability to yield expected future benefits to a business.

Resources such as cash distributed to the owners of a corporation are called ________.

The ________ principle requires that financial information is supported by independent,unbiased evidence.

The income statement describes revenues earned and expenses incurred along with the resulting net income or loss over a specified period of time,due to earnings activities.

The full disclosure principle:

Owner financing refers to resources contributed by creditors or lenders.