Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The independent group that is attempting to harmonize accounting practices of different countries is the:

Accepted Answer

A)  AICPA.
B)  IASB.
C)  CAP.
D)  SEC.
E)  FASB.F) A) and D)
G) A) and E)

Question 3

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 4

The difference between a company's assets and its liabilities, or net assets is:

Accepted Answer

A)  Net income.
B)  Expense.
C)  Equity.
D)  Revenue.
E)  Net loss.F) A) and B)
G) C) and D)

Question 5

Revenue is properly recognized:

Accepted Answer

A)  When the customer makes an order.
B)  Only if the transaction creates an account receivable.
C)  At the end of the accounting period.
D)  Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price.
E)  When cash from a sale is received.F) A) and D)
G) B) and D)

Question 6

The term ___________ refers to a liability that promises a future outflow of resources.

Accepted Answer

The answer of The term ___________ refers to a liability...

Question 7

Resources such as cash removed from the business by the business owner for personal use are called ____________.

Accepted Answer

The answer of Resources such as cash removed from the...

Question 8

_________ are beliefs that separate right from wrong and are considered accepted standards of good and bad behavior.

Accepted Answer

The answer of _________ are beliefs that separate right from...

Question 9

The Securities and Exchange Commission (SEC) is a government agency that has legal authority to establish GAAP.

Accepted Answer

A) True 
 B)False

Question 10

Financial accounting is the area of accounting that provides internal reports to assist the decision making needs of internal users.

Accepted Answer

A) True 
 B)False

Question 11

Define risk and return and discuss the relation between them.

Accepted Answer

Net income is often related to return, w...

Question 12

All of the following are classified as assets except:

Accepted Answer

A)  Accounts Receivable.
B)  Supplies.
C)  Equipment.
D)  Accounts Payable.
E)  Land.F) All of the above
G) C) and E)

Question 13

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) D) and E)
G) None of the above

Question 14

Planning involves defining an organization's ideas, goals, and actions.

Accepted Answer

A) True 
 B)False

Question 15

The statement of cash flows reports all of the following except:

Accepted Answer

A)  Cash flows from operating activities.
B)  Cash flows from investing activities.
C)  Cash flows from financing activities.
D)  The net increase or decrease in assets for the period reported.
E)  The net increase or decrease in cash for the period reported.F) All of the above
G) B) and C)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

What is the purpose of return on assets as an analytical tool?

Accepted Answer

Return on assets is useful in ...

Question 18

The balance sheet is based on the accounting equation.

Accepted Answer

A) True 
 B)False

Question 19

________________________________ explains changes in the stockholders' claim on the business's assets from net income or loss, and dividends over a period of time.

Accepted Answer

The statem...

Question 20

Marsha Bogswell is the owner of Bogswell Legal Services, Inc. Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services, Inc.?

Accepted Answer

A)  Monetary unit assumption.
B)  Going-concern assumption.
C)  Cost principle.
D)  Business entity assumption.
E)  Matching principle.F) A) and E)
G) B) and D)

Exam 1: Accounting in Business

_________ are beliefs that separate right from wrong and are considered accepted standards of good and bad behavior.

Correct AnswerverifiedShow Answer

What is the purpose of return on assets as an analytical tool?

Correct AnswerverifiedReturn on assets is useful in ...View AnswerShow Answer

The balance sheet is based on the accounting equation.

Correct AnswerverifiedShow Answer

Define risk and return and discuss the relation between them.

Correct AnswerverifiedNet income is often related to return, w...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Marsha Bogswell is the owner of Bogswell Legal Services, Inc. Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services, Inc.?

Correct AnswerverifiedShow Answer

Planning involves defining an organization's ideas, goals, and actions.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The income statement reports all of the following except:

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission (SEC) is a government agency that has legal authority to establish GAAP.

Correct AnswerverifiedShow Answer

Revenue is properly recognized:

Correct AnswerverifiedShow Answer

All of the following are classified as assets except:

Correct AnswerverifiedShow Answer

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

Correct AnswerverifiedShow Answer

The difference between a company's assets and its liabilities, or net assets is:

Correct AnswerverifiedShow Answer

The term ___________ refers to a liability that promises a future outflow of resources.

Correct AnswerverifiedShow Answer

The statement of cash flows reports all of the following except:

Correct AnswerverifiedShow Answer

The independent group that is attempting to harmonize accounting practices of different countries is the:

Correct AnswerverifiedShow Answer

Resources such as cash removed from the business by the business owner for personal use are called ____________.

Correct AnswerverifiedShow Answer

________________________________ explains changes in the stockholders' claim on the business's assets from net income or loss, and dividends over a period of time.

Correct AnswerverifiedThe statem...View AnswerShow Answer

Financial accounting is the area of accounting that provides internal reports to assist the decision making needs of internal users.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Return on assets is useful in ...
View Answer

Correct Answer
verified

Correct Answer
verified
Net income is often related to return, w...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The statem...
View Answer

Correct Answer
verified