Question 1

Risk is:

Accepted Answer

A)  Net income divided by average total assets.
B)  The reward for investment.
C)  The uncertainty about the expected return to be earned.
D)  Unrelated to expected return.
E)  Derived from the idea of getting something back from an investment.F) A) and C)
G) A) and E)

Question 2

Owner's withdrawals are expenses.

Accepted Answer

A) True 
 B)False

Question 3

The income statement reports all of the following except:

Accepted Answer

A)  Revenues earned by a business.
B)  Expenses incurred by a business.
C)  Assets owned by a business.
D)  Net income or loss earned by a business.
E)  The time period over which the earnings occurred.F) C) and E)
G) All of the above

Question 4

Cool Tours had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and withdrawals by owners of $9,000.Calculate the ending equity.

Accepted Answer

A)  $88,000.
B)  $25,000.
C)  $97,000.
D)  $38,000.
E)  $47,000.F) D) and E)
G) A) and B)

Question 5

Photometer Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Accepted Answer

A)  Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase.
B)  Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.
C)  Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect.
D)  Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase.
E)  Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.F) A) and E)
G) None of the above

Question 6

Operating activities:

Accepted Answer

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

Question 7

______________ is the area of accounting aimed at serving external users.

Accepted Answer

Financial ...

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

Identify the risk and the return in each of the following examples.
a.Investing $500 in a CD at 4.5% interest.
b.Placing a $100 bet on an NBA game.
c.Investing $10,000 in Microsoft stock.
d.Borrowing $20,000 in student loans.

Accepted Answer

a.The risk involved is that the investor...

Question 10

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Accepted Answer

A)  Increased $22,000.
B)  Decreased $22,000.
C)  Increased $89,000.
D)  Decreased $156,000.
E)  Increased $156,000.F) B) and D)
G) B) and C)

Question 11

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Accepted Answer

A)  $45,000.
B)  $92,000.
C)  $98,000.
D)  $210,000.
E)  $282,000.F) A) and B)
G) None of the above

Question 12

The ________________ assumption states that transactions and events are expressed in money units.

Accepted Answer

The answer of The ________________ assumption states that transactions and...

Question 13

A balance sheet lists:

Accepted Answer

A)  The types and amounts of the revenues and expenses of a business.
B)  Only the information about what happened to equity during a time period.
C)  The types and amounts of assets, liabilities, and equity of a business as of a specific date.
D)  The inflows and outflows of cash during the period.
E)  The assets and liabilities of a company but not the owner's equity.F) None of the above
G) B) and C)

Question 14

What distinguishes liabilities from equity?

Accepted Answer

Liabilities are creditors' claims on ass...

Question 15

Explain why ethics are an integral part of accounting.

Accepted Answer

The purpose of accounting is to provide ...

Question 16

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

Accepted Answer

A) True 
 B)False

Question 17

Classify the following activities according to the appropriate section of the statement of cash flows.
a.Operating activity
b.Investing activity
c.Financing activity
____ 1.Cash received from a one-time sale of used office equipment.
____ 2.Cash paid for withdrawals by owners.
____ 3.Cash received from customers.
____ 4.Cash received from owner contributions.
____ 5.Cash paid for utilities.
____ 6.Cash paid for a delivery van to be used in the business.

Accepted Answer

1.B; 2.C; ...

Question 18

________________ activities are the means organizations use to pay for resources such as land,building,and equipment.

Accepted Answer

The answer of ________________ activities are the means organizations use...

Question 19

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:

Accepted Answer

A)  Going-concern assumption.
B)  Cost principle.
C)  Revenue recognition principle.
D)  Objectivity principle.
E)  Business entity assumption.F) All of the above
G) A) and B)

Question 20

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Correct Answer
verified

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Correct Answer
verified

Cool Tours had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and withdrawals by owners of $9,000.Calculate the ending equity.

Correct Answer
verified

Photometer Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Correct Answer
verified

Explain why ethics are an integral part of accounting.

Correct Answer
verified
The purpose of accounting is to provide ...
View Answer

A balance sheet lists:

Correct Answer
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Correct Answer
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1.B; 2.C; ...
View Answer

Correct Answer
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What distinguishes liabilities from equity?

Correct Answer
verified
Liabilities are creditors' claims on ass...
View Answer

Owner's withdrawals are expenses.

Correct Answer
verified

________________ activities are the means organizations use to pay for resources such as land,building,and equipment.

Correct Answer
verified

The income statement reports all of the following except:

Correct Answer
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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

The ________________ assumption states that transactions and events are expressed in money units.

Correct Answer
verified

______________ is the area of accounting aimed at serving external users.

Correct Answer
verified
Financial ...
View Answer

Identify the risk and the return in each of the following examples. a.Investing $500 in a CD at 4.5% interest. b.Placing a $100 bet on an NBA game. c.Investing $10,000 in Microsoft stock. d.Borrowing $20,000 in student loans.

Correct Answer
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a.The risk involved is that the investor...
View Answer

Operating activities:

Correct Answer
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The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

Correct Answer
verified

Risk is:

Correct Answer
verified

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Correct Answer
verified

Exam 1: Accounting in Business

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Correct AnswerverifiedShow Answer

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Correct AnswerverifiedShow Answer

Cool Tours had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and withdrawals by owners of $9,000.Calculate the ending equity.

Correct AnswerverifiedShow Answer

Photometer Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Correct AnswerverifiedShow Answer

Explain why ethics are an integral part of accounting.

Correct AnswerverifiedThe purpose of accounting is to provide ...View AnswerShow Answer

A balance sheet lists:

Correct AnswerverifiedShow Answer

Correct Answerverified1.B; 2.C; ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

What distinguishes liabilities from equity?

Correct AnswerverifiedLiabilities are creditors' claims on ass...View AnswerShow Answer

Owner's withdrawals are expenses.

Correct AnswerverifiedShow Answer

________________ activities are the means organizations use to pay for resources such as land,building,and equipment.

Correct AnswerverifiedShow Answer

The income statement reports all of the following except:

Correct AnswerverifiedShow Answer

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

The ________________ assumption states that transactions and events are expressed in money units.

Correct AnswerverifiedShow Answer

______________ is the area of accounting aimed at serving external users.

Correct AnswerverifiedFinancial ...View AnswerShow Answer

Identify the risk and the return in each of the following examples. a.Investing $500 in a CD at 4.5% interest. b.Placing a $100 bet on an NBA game. c.Investing $10,000 in Microsoft stock. d.Borrowing $20,000 in student loans.

Correct Answerverifieda.The risk involved is that the investor...View AnswerShow Answer

Operating activities:

Correct AnswerverifiedShow Answer

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

Correct AnswerverifiedShow Answer

Risk is:

Correct AnswerverifiedShow Answer

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Correct AnswerverifiedShow Answer

Correct Answer
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The purpose of accounting is to provide ...
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1.B; 2.C; ...
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Correct Answer
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Liabilities are creditors' claims on ass...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Financial ...
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Correct Answer
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a.The risk involved is that the investor...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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