Question 1

The monetary unit principle means that transactions are expressed using units of money as the common denominator.

Accepted Answer

A) True 
 B)False

Question 2

How does the going concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f...

Question 3

If a business is not being sold or closed, the amounts reported in the accounts for assetsused in operations are based on costs. This practice is justified by the:

Accepted Answer

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

Question 4

A statement of financial position is another name for

Accepted Answer

A)  The balance sheet.
B)  The statement of cash flows.
C)  The accounting equation.
D)  The statement of changes in equity.
E)  The income statement.F) A) and B)
G) D) and E)

Question 5

Something of value, such as products, services and money, is called a(n)

Accepted Answer

A)  Accounting equation.
B)  Business transaction.
C)  Source document.
D)  Economic consideration.
E)  Business event.F) A) and B)
G) A) and C)

Question 6

At the request of the Board of Directors, internal auditors perform the audit function to protect shareholder interests.

Accepted Answer

A) True 
 B)False

Question 7

Describe the main user groups, their members, and their uses of accountinginformation.

Accepted Answer

There are two types of users of accounti...

Question 8

Which of the following statements is correct regarding sales invoices?

Accepted Answer

A)  Sellers use them for recording sales.
B)  A sales invoice is a type of source document.
C)  Buyers use them for recording purchases.
D)  They are required for information to be objective.
E)  All of these answers are correct.F) A) and B)
G) All of the above

Question 9

Business events do not affect the accounting equation

Accepted Answer

A) True 
 B)False

Question 10

Internal operating functions include research and development, distribution, and human resources.

Accepted Answer

A) True 
 B)False

Question 11

Generally accepted accounting principles are

Accepted Answer

A)  Required to make financial statement information relevant and faithfully represented.
B)  Only used by auditors.
C)  Only used for internal reporting.
D)  Not used in the real world.
E)  Only used for reporting to Canada Revenue Agency.F) D) and E)
G) B) and D)

Question 12

An owner's cash investment in a business creates an asset (cash), a liability (note payable), and equity (owner investments).

Accepted Answer

A) True 
 B)False

Question 13

Revenue is recognized in most businesses

Accepted Answer

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

Question 14

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Accepted Answer

A)  Cost principle.
B)  Revenue recognition principle.
C)  Business entity principle.
D)  Going concern principle.
E)  Monetary unit principle.F) C) and D)
G) A) and B)

Question 15

Which of the following is an example of a source document? 113)

Accepted Answer

A)  Employee earnings records.
B)  Cheque.
C)  Invoice.
D)  Bank statement.
E)  All of these answers are correct.F) A) and D)
G) All of the above

Question 16

The first section of the income statement reports cash from operating activities

Accepted Answer

A) True 
 B)False

Question 17

At the end of its first year of operations, Lockerbie and Role Company has total assetsof $3,000,000 and total liabilities of $1,200,000. The owner originally invested$200,000 in the business, but has not made any further investments or taken any withdrawals. What is the first year's net income for Lockerbie and Role Company?

Accepted Answer

A)  $3,200,000.
B)  $3,000,000.
C)  $1,000,000.
D)  $1,800,000.
E)  $1,600,000.F) B) and D)
G) A) and E)

Question 18

Exchanges between the entity and some other person or organization are

Accepted Answer

A)  Internal transactions.
B)  External transactions.
C)  Investments.
D)  Source documents.
E)  Business papers.F) A) and E)
G) B) and E)

Question 19

The business entity principle

Accepted Answer

A)  Means that business records should be kept separate from the owner's personal records.
B)  Requires that corporations have shareholders.
C)  Requires that sole proprietors have unlimited liability.
D)  Requires that partnership income be taxed at the partnership level.
E)  Requires that partnerships have written agreements.F) B) and D)
G) B) and E)

Question 20

A liability expressed by a written promise to make a future payment is usually called an account payable.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

A liability expressed by a written promise to make a future payment is usually called an account payable.

Correct Answer
verified

At the request of the Board of Directors, internal auditors perform the audit function to protect shareholder interests.

Correct Answer
verified

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Correct Answer
verified

The monetary unit principle means that transactions are expressed using units of money as the common denominator.

Correct Answer
verified

Describe the main user groups, their members, and their uses of accountinginformation.

Correct Answer
verified
There are two types of users of accounti...
View Answer

Something of value, such as products, services and money, is called a(n)

Correct Answer
verified

Revenue is recognized in most businesses

Correct Answer
verified

A statement of financial position is another name for

Correct Answer
verified

Which of the following statements is correct regarding sales invoices?

Correct Answer
verified

Exchanges between the entity and some other person or organization are

Correct Answer
verified

An owner's cash investment in a business creates an asset (cash), a liability (note payable), and equity (owner investments).

Correct Answer
verified

Generally accepted accounting principles are

Correct Answer
verified

Business events do not affect the accounting equation

Correct Answer
verified

If a business is not being sold or closed, the amounts reported in the accounts for assetsused in operations are based on costs. This practice is justified by the:

Correct Answer
verified

How does the going concern principle affect reporting asset values of a business?

Correct Answer
verified
The going-concern principle means that f...
View Answer

Which of the following is an example of a source document? 113)

Correct Answer
verified

Correct Answer
verified

Internal operating functions include research and development, distribution, and human resources.

Correct Answer
verified

The first section of the income statement reports cash from operating activities

Correct Answer
verified

The business entity principle

Correct Answer
verified

Exam 1: Accounting in Business

A liability expressed by a written promise to make a future payment is usually called an account payable.

Correct AnswerverifiedShow Answer

At the request of the Board of Directors, internal auditors perform the audit function to protect shareholder interests.

Correct AnswerverifiedShow Answer

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Correct AnswerverifiedShow Answer

The monetary unit principle means that transactions are expressed using units of money as the common denominator.

Correct AnswerverifiedShow Answer

Describe the main user groups, their members, and their uses of accountinginformation.

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

Something of value, such as products, services and money, is called a(n)

Correct AnswerverifiedShow Answer

Revenue is recognized in most businesses

Correct AnswerverifiedShow Answer

A statement of financial position is another name for

Correct AnswerverifiedShow Answer

Which of the following statements is correct regarding sales invoices?

Correct AnswerverifiedShow Answer

Exchanges between the entity and some other person or organization are

Correct AnswerverifiedShow Answer

An owner's cash investment in a business creates an asset (cash), a liability (note payable), and equity (owner investments).

Correct AnswerverifiedShow Answer

Generally accepted accounting principles are

Correct AnswerverifiedShow Answer

Business events do not affect the accounting equation

Correct AnswerverifiedShow Answer

If a business is not being sold or closed, the amounts reported in the accounts for assetsused in operations are based on costs. This practice is justified by the:

Correct AnswerverifiedShow Answer

How does the going concern principle affect reporting asset values of a business?

Correct AnswerverifiedThe going-concern principle means that f...View AnswerShow Answer

Which of the following is an example of a source document? 113)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Internal operating functions include research and development, distribution, and human resources.

Correct AnswerverifiedShow Answer

The first section of the income statement reports cash from operating activities

Correct AnswerverifiedShow Answer

The business entity principle

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
There are two types of users of accounti...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

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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Correct Answer
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The going-concern principle means that f...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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