Question 1

The four basic financial statements include the balance sheet,income statement,statement of retained earnings,and statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 2

Cage Company had net income of $160 million and average total assets of $2,000 million.Its return on assets (ROA) is:

Accepted Answer

A)  80%.
B)  0.8%.
C)  8%.
D)  12.5%.
E)  125%.F) B) and E)
G) A) and B)

Question 3

All of the following are external users of accounting information except:

Accepted Answer

A)  Lenders.
B)  Shareholders.
C)  Board of directors.
D)  Chief executive officer (CEO) .
E)  Customers.F) B) and D)
G) A) and D)

Question 4

If a company paid $38,000 of its accounts payable in cash,what was the effect on the accounting equation?

Accepted Answer

A)  Assets would decrease $38,000,liabilities would decrease $38,000,and equity would decrease $38,000.
B)  Assets would decrease $38,000,liabilities would decrease $38,000,and equity would increase $38,000.
C)  Assets would decrease $38,000,liabilities would decrease $38,000,and equity remains unchanged.
D)  There would be no effect on the accounts because the accounts are affected by the same amount.
E)  Assets would increase $38,000 and liabilities would decrease $38,000.F) B) and E)
G) A) and E)

Question 5

The measurement principle,also called the cost principle:

Accepted Answer

A)  Prescribes that accounting information is based on actual cost.
B)  Provides guidance on when a company must recognize revenue.
C)  Prescribes that a company report the details behind financial statements that would impact users' decisions.
D)  Prescribes that a company record the expenses it incurred to generate the revenue reported.
E)  Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.F) C) and E)
G) A) and D)

Question 6

Match between columns
                        Premises: Resources such as cash that a stockholder puts into the company.
The uncertainty about the return to be earned.
Resources such as cash that a company distributes to stockholders for personal use.
Expresses the relation of assets,liabilities and equity in a company,comparing the resources the company owns to the sources of funds to acquire the resources.
Resources a company owns or controls that are expected to yield future benefit.
Decreases in equity from costs of providing products or services to customers.
A financial ratio stated as income divided by assets invested.
Creditor's claims on a company's assets.

Accepted Answer

The Answer of Return on assets and Liabilities and Expenses is...

Question 7

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.

Accepted Answer

The answer of There are three major types of business...

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

An example of an investing activity is:

Accepted Answer

A)  Paying wages of employees.
B)  Cash dividends paid.
C)  Purchase of land.
D)  Selling inventory.
E)  Stockholder investments.F) A) and B)
G) All of the above

Question 10

Dividends are subtracted as expenses in the calculation of net income.

Accepted Answer

A) True 
 B)False

Question 11

The four common forms of business ownership include sole proprietorship,partnership,corporation,and non-profit.

Accepted Answer

A) True 
 B)False

Question 12

From the information given below,prepare a November income statement,a November statement of retained earnings,and a November 30 balance sheet.On November 1 of the current year,Victoria Garza,the sole stockholder,began Garza Décor with an initial investment of $50,000 cash.On November 30,her records showed the following (alphabetically arranged)items and amounts.

Accepted Answer

The answer of From the information given below,prepare a November...

Question 13

Rushing had net income of $240 million and average total assets of $2,000 million.Its return on assets is:

Accepted Answer

A)  12%.
B)  120%.
C)  80%.
D)  8%.
E)  800%.F) C) and E)
G) C) and D)

Question 14

External users of accounting information include all of the following except:

Accepted Answer

A)  Shareholders.
B)  Customers.
C)  Purchasing managers.
D)  Government regulators.
E)  Creditors.F) None of the above
G) B) and E)

Question 15

The rule that (1) requires revenue to be recognized when goods or services are provided to customers and (2) at the amount expected to be received from the customer is called the:

Accepted Answer

A)  Going-concern assumption.
B)  Measurement (Cost) principle.
C)  Revenue recognition principle.
D)  Objectivity principle.
E)  Business entity assumption.F) A) and B)
G) A) and D)

Question 16

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Accepted Answer

A)  Total revenues of $80,000 and total expenses of $60,000.
B)  Total revenues of $170,000 and total expenses of $150,000.
C)  Total revenues of $60,000 and total expenses of $40,000.
D)  Total revenues of $70,000 and total expenses of $60,000.
E)  Total revenues of $40,000 and total expenses of $20,000.F) B) and E)
G) C) and D)

Question 18

Accounting is an information and measurement system that does all of the following except:

Accepted Answer

A)  Identifies business activities.
B)  Records business activities.
C)  Communicates business activities.
D)  Eliminates the need for interpreting financial data.
E)  Helps people make better decisions.F) None of the above
G) A) and D)

Question 19

The four common forms of business ownership include sole proprietorship,partnership,limited liability company (LLC),and corporation.

Accepted Answer

A) True 
 B)False

Question 20

Internal users of accounting information do not directly run the organization and have limited access to its accounting information.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

Correct Answer
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The measurement principle,also called the cost principle:

Correct Answer
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The four common forms of business ownership include sole proprietorship,partnership,corporation,and non-profit.

Correct Answer
verified

Dividends are subtracted as expenses in the calculation of net income.

Correct Answer
verified

Cage Company had net income of $160 million and average total assets of $2,000 million.Its return on assets (ROA) is:

Correct Answer
verified

The four basic financial statements include the balance sheet,income statement,statement of retained earnings,and statement of cash flows.

Correct Answer
verified

The rule that (1) requires revenue to be recognized when goods or services are provided to customers and (2) at the amount expected to be received from the customer is called the:

Correct Answer
verified

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Correct Answer
verified

An example of an investing activity is:

Correct Answer
verified

All of the following are external users of accounting information except:

Correct Answer
verified

Rushing had net income of $240 million and average total assets of $2,000 million.Its return on assets is:

Correct Answer
verified

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Correct Answer
verified

Accounting is an information and measurement system that does all of the following except:

Correct Answer
verified

External users of accounting information include all of the following except:

Correct Answer
verified

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

Correct Answer
verified

If a company paid $38,000 of its accounts payable in cash,what was the effect on the accounting equation?

Correct Answer
verified

Internal users of accounting information do not directly run the organization and have limited access to its accounting information.

Correct Answer
verified

Match each of the following terms with the most appropriate definition.

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.

Correct Answer
verified

The four common forms of business ownership include sole proprietorship,partnership,limited liability company (LLC),and corporation.

Correct Answer
verified

Exam 1: Accounting in Business

Correct AnswerverifiedShow Answer

The measurement principle,also called the cost principle:

Correct AnswerverifiedShow Answer

The four common forms of business ownership include sole proprietorship,partnership,corporation,and non-profit.

Correct AnswerverifiedShow Answer

Dividends are subtracted as expenses in the calculation of net income.

Correct AnswerverifiedShow Answer

Cage Company had net income of $160 million and average total assets of $2,000 million.Its return on assets (ROA) is:

Correct AnswerverifiedShow Answer

The four basic financial statements include the balance sheet,income statement,statement of retained earnings,and statement of cash flows.

Correct AnswerverifiedShow Answer

The rule that (1) requires revenue to be recognized when goods or services are provided to customers and (2) at the amount expected to be received from the customer is called the:

Correct AnswerverifiedShow Answer

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Correct AnswerverifiedShow Answer

An example of an investing activity is:

Correct AnswerverifiedShow Answer

All of the following are external users of accounting information except:

Correct AnswerverifiedShow Answer

Rushing had net income of $240 million and average total assets of $2,000 million.Its return on assets is:

Correct AnswerverifiedShow Answer

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Correct AnswerverifiedShow Answer

Accounting is an information and measurement system that does all of the following except:

Correct AnswerverifiedShow Answer

External users of accounting information include all of the following except:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a company paid $38,000 of its accounts payable in cash,what was the effect on the accounting equation?

Correct AnswerverifiedShow Answer

Internal users of accounting information do not directly run the organization and have limited access to its accounting information.

Correct AnswerverifiedShow Answer

Match each of the following terms with the most appropriate definition.

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.

Correct AnswerverifiedShow Answer

The four common forms of business ownership include sole proprietorship,partnership,limited liability company (LLC),and corporation.

Correct AnswerverifiedShow Answer

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