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Exam 1: Accounting in Business

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Question 81

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The assets of a company total $700,000;the liabilities,$200,000.What are the net assets?

A) $900,000.
B) $700,000.
C) $500,000.
D) $200,000.
E) It is impossible to determine unless the amount of this owners' investment is known.

F) All of the above
G) C) and E)

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Question 82

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The International Accounting Standards Board (IASB) :

A) Hopes to create harmony among accounting practices of different countries to improve comparability.
B) Is the government group that establishes reporting requirements for companies that issue stock to the investing public.
C) Has the authority to impose its standards on companies around the world.
D) Is the only source of generally accepted accounting principles (GAAP) .
E) Only applies to companies that are members of the European Union.

F) A) and C)
G) C) and D)

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Question 83

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Liabilities are the owner's claim on assets.

There are three major types of business activities.______________ activities involve using resources to research,develop,purchase,produce,distribute,and market products and services and receiving amounts from selling products and services.

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities.Which of the following transactions could have caused that effect?

Data for Kennedy Realty are as follows: The owner,Finn Kennedy,withdrew a total of $30,000 for personal use during the year.Using the above data,prepare Kennedy Realty's Statement of Owner's Equity for the year ended December 31.

Opportunities in accounting include auditing,consulting,market research,and tax planning.

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

Doc's Ribhouse had beginning equity of $52,000;net income of $35,000,and withdrawals by the owner of $12,000.Calculate the ending equity.

The question of when revenue should be recognized on the income statement according to GAAP is addressed by the:

Using the accounting equation,equity is equal to ________________________.

According to the cost principle,it is necessary for managers to report an approximation of an asset's market value upon purchase.

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

A resource that the owner takes from the company is called a(n) :

A corporation is:

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year.Its assets at the beginning of the year were $400,000.At the end of the year assets were worth $450,000.Calculate its return on assets.

The financial statement that shows the beginning balance of owner's equity;the changes in equity that resulted from new investments by the owner,net income (or net loss) ;withdrawals;and the ending balance,is the:

Investing activities are the means an organization uses to pay for resources like land,buildings,and equipment to carry out its plans.

The ______________ assumption assumes business will continue operating indefinitely instead of being closed or sold.

An exchange of value between two entities that yields a change in the accounting equation is called: