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Exam 1: Accounting in Business

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Question 21

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If a company has excess space in its building that it rents to another company for $700,what is the effect on the accounting equation when the first rent payment is collected?

A) Assets would decrease $700 and liabilities would decrease $700.
B) Assets would decrease $700 and equity would increase $700.
C) Assets would increase $700 and equity would decrease $700.
D) Assets would increase $700 and equity would increase $700.
E) Liabilities would decrease $700 and equity would increase $700.

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Question 22

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Return on assets is useful to decision makers for evaluating management,analyzing and forecasting profits,and in planning activities.

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Question 23

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All of the following are true regarding ethics except:

_________ are beliefs that separate right from wrong and are considered accepted standards of good and bad behavior.

Revenues are:

If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period,the assets of the business must have:

Regulators often have legal authority over certain activities of organizations.

Owner withdrawals are expenses.

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

The accounting equation can be restated as: Assets - Equity = Liabilities.

There are at least three types of partnerships that limit the partners' liability.They are 1)_____________________,2)___________________,and 3)______________________. answers can appear in any order

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

Planning involves defining an organization's ideas,goals,and actions.

The primary objective of financial accounting is to:

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:

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

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

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Investing activities are the acquiring and disposing of resources that an organization uses to acquire and sell its products or services.

The characteristics below apply to at least one of the forms of business organization. a.Is a separate legal entity. b.Is allowed to be owned by one person only. c.Owner or owners are personally liable for debts of the business. d.Is a separately taxable entity. e.Is a business entity. f.May have a contract specifying the division of profits among the owners. g.Has an unlimited life Use the following format to indicate (with a "yes" or "no")whether or not a characteristic applies to each type of business organization.