Question 1

A balance sheet covers a period of time such as a month or year.

Accepted Answer

A) True 
 B)False

Question 2

An example of a financing activity is:

Accepted Answer

A)   Buying office supplies.
B)   Obtaining a long-term loan.
C)   Buying office equipment.
D)   Selling inventory.
E)   Buying land.F) None of the above
G) A) and E)

Question 3

Using the accounting equation, equity is equal to _______________________.

Accepted Answer

Assets min...

Question 4

Identifying the proper ethical path is easy.

Accepted Answer

A) True 
 B)False

Question 5

A ____________________ is a business that is owned by only one person.

Accepted Answer

The answer of A ____________________ is a business that is...

Question 6

FastLane has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

Accepted Answer

A)   7.7%.
B)   8.5%.
C)   9.5%.
D)   11.8%.
E)   13.0%.F) A) and B)
G) C) and D)

Question 7

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Accepted Answer

A) True 
 B)False

Question 8

Bookkeeping is the recording of transactions and events and is only part of accounting.

Accepted Answer

A) True 
 B)False

Question 9

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease? By what amount?

Accepted Answer

The answer of If the liabilities of a company increased...

Question 10

Identify and describe the four basic financial statements:

Accepted Answer

The four basic financial statements are ...

Question 11

The Financial Accounting Standards Board is the private group that sets both broad and specific accounting principles.

Accepted Answer

A) True 
 B)False

Question 12

______________ users of accounting information are not directly involved in running the organization.

Accepted Answer

The answer of ______________ users of accounting information are not...

Question 13

Creditors claims on assets that reflect obligations to transfer assets are called ____________.

Accepted Answer

The answer of Creditors claims on assets that reflect obligations...

Question 14

Resources that are expected to yield future benefits are:

Accepted Answer

A)   Assets.
B)   Revenues.
C)   Liabilities.
D)   Owner's Equity.
E)   Expenses.F) None of the above
G) A) and B)

Question 15

Determine the net income of a company for which the following information is available for the month of May.

Accepted Answer

A)   $190,000.
B)   $210,000.
C)   $230,000.
D)   $400,000.
E)   $610,000.F) C) and D)
G) B) and E)

Question 16

A financial statement providing information that helps users understand a company's financial status, and which lists the types and amounts of assets, liabilities, and equity as of a specific date, is called a(n) :

Accepted Answer

A)   Balance sheet.
B)   Income statement.
C)   Statement of cash flows.
D)   Statement of owner's equity.
E)   Financial Status Statement.F) A) and C)
G) B) and E)

Question 17

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

Accepted Answer

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

Question 18

Identify the users and uses of accounting information.

Accepted Answer

There are two general types of users of ...

Question 19

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

Question 20

Every business transaction leaves the accounting equation in balance.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

Identify and describe the four basic financial statements:

Correct AnswerverifiedThe four basic financial statements are ...View AnswerShow Answer

A balance sheet covers a period of time such as a month or year.

Correct AnswerverifiedShow Answer

The Financial Accounting Standards Board is the private group that sets both broad and specific accounting principles.

Correct AnswerverifiedShow Answer

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Correct AnswerverifiedShow Answer

Resources that are expected to yield future benefits are:

Correct AnswerverifiedShow Answer

A ____________________ is a business that is owned by only one person.

Correct AnswerverifiedShow Answer

Bookkeeping is the recording of transactions and events and is only part of accounting.

Correct AnswerverifiedShow Answer

FastLane has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

Correct AnswerverifiedShow Answer

Identifying the proper ethical path is easy.

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

Determine the net income of a company for which the following information is available for the month of May.

Correct AnswerverifiedShow Answer

Using the accounting equation, equity is equal to _______________________.

Correct AnswerverifiedAssets min...View AnswerShow Answer

Every business transaction leaves the accounting equation in balance.

Correct AnswerverifiedShow Answer

Creditors claims on assets that reflect obligations to transfer assets are called ____________.

Correct AnswerverifiedShow Answer

Identify the users and uses of accounting information.

Correct AnswerverifiedThere are two general types of users of ...View AnswerShow Answer

An example of a financing activity is:

Correct AnswerverifiedShow Answer

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

Correct AnswerverifiedShow Answer

A financial statement providing information that helps users understand a company's financial status, and which lists the types and amounts of assets, liabilities, and equity as of a specific date, is called a(n) :

Correct AnswerverifiedShow Answer

______________ users of accounting information are not directly involved in running the organization.

Correct AnswerverifiedShow Answer

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease? By what amount?

Correct AnswerverifiedShow Answer

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The four basic financial statements are ...
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Assets min...
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There are two general types of users of ...
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