Question 1

What distinguishes liabilities from equity?

Accepted Answer

Liabilities are creditors' claims on ass...

Question 2

A company acquires equipment for $75,000 cash. This represents a(n)

Accepted Answer

A)   Operating activity.
B)   Investing activity.
C)   Financing activity.
D)   Revenue activity.
E)   Expense activity.F) All of the above
G) A) and C)

Question 3

The statement of changes in equity:

Accepted Answer

A)   Reports how equity changes at a point in time.
B)   Reports how equity changes over a period of time.
C)   Reports on cash flows for operating, financing, and investing activities over a period of time.
D)   Reports on cash flows for operating, financing, and investing activities at a point in time.
E)   Reports on amounts for assets, liabilities, and equity at a point in time.F) C) and E)
G) A) and B)

Question 4

The _______________ assumption requires that financial information is supported by independent, unbiased evidence.

Accepted Answer

The answer of The _______________ assumption requires that financial information...

Question 5

______________ activities involve using resources to research, develop, purchase, produce, distribute, and market products and services.

Accepted Answer

The answer of ______________ activities involve using resources to research,...

Question 6

Describe the three types of activities reported on the statement of cash flows.

Accepted Answer

The three types of activities reported i...

Question 7

Match the following definitions with the terms 1 through 9. Place the letter that identifies the best definition in the blank space next to the term.

Accepted Answer

The answer of Match the following definitions with the terms...

Question 8

A company's balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

Accepted Answer

A)   $104,000.
B)   $76,000.
C)   $32,000.
D)   $68,000.
E)   $176,000.F) B) and E)
G) A) and D)

Question 9

Viscount Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

Accepted Answer

A)   Total assets decrease and equity increases.
B)   Both total assets and total liabilities decrease.
C)   Total assets, total liabilities, and equity are unchanged.
D)   Both total assets and equity are unchanged and liabilities increase.
E)   Total assets increase and equity decreases.F) A) and D)
G) A) and C)

Question 10

Ethical behavior requires:

Accepted Answer

A)   That auditors' pay not depend on the success of the client's business.
B)   Auditors to invest in businesses they audit.
C)   Analysts to report information favorable to their companies.
D)   Managers to use accounting information to benefit themselves.
E)   That auditors' pay depend on the success of the client's business.F) A) and B)
G) A) and E)

Question 11

An income statement reports on investing and financing activities.

Accepted Answer

A) True 
 B)False

Question 12

________________________________ reports changes in the owner's claim on the business's assets over a period of time.

Accepted Answer

The statem...

Question 13

Cash investments by owners are listed on which of the following statements?

Accepted Answer

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

Question 14

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

Accepted Answer

A) True 
 B)False

Question 15

An example of an operating activity is:

Accepted Answer

A)   Paying wages.
B)   Purchasing office equipment.
C)   Borrowing money from a bank.
D)   Selling shares.
E)   Paying off a loan.F) B) and E)
G) A) and E)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Another name for equity is:

Accepted Answer

A)   Net income.
B)   Expenses.
C)   Net assets.
D)   Revenue.
E)   Net loss.F) C) and D)
G) A) and D)

Question 18

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

Accepted Answer

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

Question 19

Accounting is an ______________________ that identifies, records and communicates relevant, reliable and comparable information about an organization's economic activities.

Accepted Answer

Information and meas...

Question 20

In accounting, the rule that requires that assets, services, and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called _____________________________.

Accepted Answer

The answer of In accounting, the rule that requires that...

Exam 1: Accounting in Business

Another name for equity is:

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An income statement reports on investing and financing activities.

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Describe the three types of activities reported on the statement of cash flows.

Correct AnswerverifiedThe three types of activities reported i...View AnswerShow Answer

The _______________ assumption requires that financial information is supported by independent, unbiased evidence.

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The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

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

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An example of an operating activity is:

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Match the following definitions with the terms 1 through 9. Place the letter that identifies the best definition in the blank space next to the term.

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What distinguishes liabilities from equity?

Correct AnswerverifiedLiabilities are creditors' claims on ass...View AnswerShow Answer

In accounting, the rule that requires that assets, services, and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called _____________________________.

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

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The statement of changes in equity:

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A company's balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

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Viscount Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

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A company acquires equipment for $75,000 cash. This represents a(n)

Correct AnswerverifiedShow Answer

Cash investments by owners are listed on which of the following statements?

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Accounting is an ______________________ that identifies, records and communicates relevant, reliable and comparable information about an organization's economic activities.

Correct AnswerverifiedInformation and meas...View AnswerShow Answer

______________ activities involve using resources to research, develop, purchase, produce, distribute, and market products and services.

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________________________________ reports changes in the owner's claim on the business's assets over a period of time.

Correct AnswerverifiedThe statem...View AnswerShow Answer

Ethical behavior requires:

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The three types of activities reported i...
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Liabilities are creditors' claims on ass...
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Information and meas...
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The statem...
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