Question 1

The area of accounting aimed at serving the decision-making needs of internal users is:

Accepted Answer

A)   Financial accounting.
B)   Managerial accounting.
C)   Auditing.
D)   Internal control.
E)   Marketing.F) B) and E)
G) D) and E)

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

Identify the three forms of business organizations.

Accepted Answer

The three forms of b...

Question 4

Non-business organizations often operate educational and religious services for profit.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)   Statement of financial position.
B)   Statement of cash flows.
C)   Balance sheet.
D)   Income statement.
E)   Statement of changes in equity.F) A) and D)
G) B) and C)

Question 6

A characteristic of liabilities is their capacity to reduce future assets.

Accepted Answer

A) True 
 B)False

Question 7

If a business is not being sold or closed,the amounts reported in the accounts for assets used 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)   Business entity principle.
E)   Monetary unit principle.F) B) and C)
G) A) and B)

Question 8

A payment from a proprietorship or partnership to its owner or owners is called a(n) :

Accepted Answer

A)   Dividend.
B)   Withdrawal.
C)   Expense.
D)   Equity.
E)   Cheque.F) D) and E)
G) A) and C)

Question 9

Which of the following statements is correct regarding sales invoices?

Accepted Answer

A)   A sales invoice is a type of source document.
B)   Sellers use them for recording sales.
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 E)
G) A) and D) E

Question 10

Accounting is an information system that identifies,measures,records and communicates relevant information that faithfully represents an organization's economic activities.

Accepted Answer

A) True 
 B)False

Question 11

Explain why ethics and social responsibility are an integral part of accounting.

Accepted Answer

The purpose of accounting is to provide ...

Question 12

A primary purpose of ________________ is to make information in financial statements relevant and faithfully represented.

Accepted Answer

The answer of A primary purpose of ________________ is to...

Question 13

A characteristic of assets is their ability to provide current benefits to the business.

Accepted Answer

A) True 
 B)False

Question 14

The primary objective of financial accounting is:

Accepted Answer

A)   To help organizations keep track of financing activities.
B)   To provide external reports to help users analyze an organization's activities.
C)   To help an organization define its ideas,goals,and actions.
D)   To help an organization to keep track of its buying and selling of resources.
E)   To prepare budgets.F) None of the above
G) A) and E)

Question 15

The description of the relationship between a company's assets,liabilities,and equity,which is expressed as Assets = Liabilities + Equity,is known as the:

Accepted Answer

A)   Balance sheet.
B)   Accounting equation.
C)   Business equation.
D)   Liability equation.
E)   Net income.F) A) and D)
G) A) and C)

Question 16

Celery Company has assets of $150,000,liabilities of $90,000,and equity of $60,000.It buys supplies for cash $5,000.What effect would this transaction have on the accounting equation?

Accepted Answer

A)   Assets,$5,000 increase,equity,$5,000 increase.
B)   Assets,$5,000 increase,equity,$5,000 decrease.
C)   Liabilities,$5,000 increase,equity,$5,000 decrease.
D)   Assets,$5,000 decrease,equity,$5,000 decrease.
E)   Assets,no effect,liabilities,no effect.F) C) and D)
G) A) and B)

Question 17

What is the statement of financial position? What is its purpose?

Accepted Answer

The statement of financial position,or b...

Question 18

The excess of expenses over revenues for a period is:

Accepted Answer

A)   Net assets.
B)   Equity.
C)   Net loss.
D)   Net income.
E)   A liability.F) D) and E)
G) A) and C)

Question 19

The rules adopted by the accounting profession as guides in measuring,recording,and reporting the financial affairs and activities of a business are:

Accepted Answer

A)   Both broad and specific principles.
B)   Known as generally accepted accounting principles.
C)   Abbreviated as GAAP.
D)   Intended to make information in financial statements relevant and faithfully represented.
E)   All of these answers are correct.F) B) and C)
G) A) and E) E

Question 20

Private accountants work for several employers.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

The area of accounting aimed at serving the decision-making needs of internal users is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedTrue

Identify the three forms of business organizations.

Correct AnswerverifiedThe three forms of b...View AnswerShow Answer

Non-business organizations often operate educational and religious services for profit.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A characteristic of liabilities is their capacity to reduce future assets.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A payment from a proprietorship or partnership to its owner or owners is called a(n) :

Correct AnswerverifiedShow Answer

Which of the following statements is correct regarding sales invoices?

Correct AnswerverifiedE

Accounting is an information system that identifies,measures,records and communicates relevant information that faithfully represents an organization's economic activities.

Correct AnswerverifiedShow Answer

Explain why ethics and social responsibility are an integral part of accounting.

Correct AnswerverifiedThe purpose of accounting is to provide ...View AnswerShow Answer

A primary purpose of ________________ is to make information in financial statements relevant and faithfully represented.

Correct AnswerverifiedShow Answer

A characteristic of assets is their ability to provide current benefits to the business.

Correct AnswerverifiedShow Answer

The primary objective of financial accounting is:

Correct AnswerverifiedShow Answer

The description of the relationship between a company's assets,liabilities,and equity,which is expressed as Assets = Liabilities + Equity,is known as the:

Correct AnswerverifiedShow Answer

Celery Company has assets of $150,000,liabilities of $90,000,and equity of $60,000.It buys supplies for cash $5,000.What effect would this transaction have on the accounting equation?

Correct AnswerverifiedShow Answer

What is the statement of financial position? What is its purpose?

Correct AnswerverifiedThe statement of financial position,or b...View AnswerShow Answer

The excess of expenses over revenues for a period is:

Correct AnswerverifiedShow Answer

The rules adopted by the accounting profession as guides in measuring,recording,and reporting the financial affairs and activities of a business are:

Correct AnswerverifiedE

Private accountants work for several employers.

Correct AnswerverifiedShow Answer

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True

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The three forms of b...
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E

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The purpose of accounting is to provide ...
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The statement of financial position,or b...
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E

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