Question 1

The balance sheet is frequently referred to as

Accepted Answer

A)  an operating statement.
B)  the statement of financial position.
C)  the statement of cash flows.
D)  the statement of retained earnings.

Question 2

In order to possess future service potential, an asset must have physical substance.

Accepted Answer

A) True 
 B)False

Question 3

A partnership must have more than one owner.

Accepted Answer

A) True 
 B)False

Question 4

Martin Corporation purchased land in 2007 for $290,000. In 2015, it purchased a nearly identical parcel of land for $460,000. In its 2015 balance sheet, Martin valued these two parcels of land at a combined value of $920,000. By reporting the land in this manner, Martin Corp. has violated the

Accepted Answer

A)  historical cost principle
B)  convergence
C)  economic entity assumption
D)  monetary unit assumption

Question 5

A net loss will result during a time period when

Accepted Answer

A)  assets exceed liabilities.
B)  assets exceed stockholders' equity.
C)  expenses exceed revenues.
D)  revenues exceed expenses.

Question 6

A dividend is

Accepted Answer

A)  a distribution of the company's earnings to its stockholders.
B)  equal to liabilities minus stockholders' equity.
C)  equal to assets minus stockholders' equity.
D)  equal to revenues less expenses

Question 7

The ending retained earnings balance is reported on both the retained earnings statement and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

The origins of accounting are attributed to Luca Pacioli, a famous mathematician.

Accepted Answer

A) True 
 B)False

Question 9

Stahl Consulting started the year with total assets of $60,000 and total liabilities of $15,000. During the year, the business recorded $48,000 in catering revenues and $30,000 in expenses. Stahl issued stock of $9,000 and paid dividends of $15,000 during the year. The net income reported by Stahl Consulting for the year was:

Accepted Answer

A)  $3,000.
B)  $12,000.
C)  $18,000.
D)  $27,000.

Question 10

Mofro's Computer Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000. During the year, the business recorded $500,000 in computer repair revenues, $300,000 in expenses, and Mofro paid dividends of $50,000. The net income reported by Mofro's Computer Repair Shop for the year was

Accepted Answer

A)  $100,000.
B)  $150,000.
C)  $200,000.
D)  $250,000.

Question 11

As of June 30, 2015, Actual Tigers Company has assets of $100,000 and stockholders' equity of $40,000. What are the liabilities for Actual Tigers Company as of June 30, 2015?

Accepted Answer

A)  $40,000
B)  $60,000
C)  $100,000
D)  $140,000

Question 12

Liabilities of a company would not include

Accepted Answer

A)  notes payable.
B)  accounts payable.
C)  salaries and wages payable.
D)  cash.

Question 13

Stockholders' equity is often referred to as

Accepted Answer

A)  residual equity.
B)  leftovers.
C)  spoils.
D)  second equity.

Question 14

Financial statements are the major means of communicating accounting information to interested parties.

Accepted Answer

A) True 
 B)False

Question 15

Druganaut Company buys a $21,000 van on credit. The transaction will affect the

Accepted Answer

A)  income statement only.
B)  balance sheet only.
C)  income statement and retained earnings statement only.
D)  income statement, retained earnings statement, and balance sheet.

Question 16

At the time an asset is acquired, cost and fair value should be the same.

Accepted Answer

A) True 
 B)False

Question 17

Financial information that is capable of making a difference in a decision is

Accepted Answer

A)  faithfully representative.
B)  relevant.
C)  convergent.
D)  generally accepted.

Question 18

Preparing tax returns and engaging in tax planning is performed by

Accepted Answer

A)  public accountants only.
B)  private accountants only.
C)  both public and private accountants.
D)  IRS accountants only.

Question 19

The final step in solving an ethical dilemma is to

Accepted Answer

A)  identify and analyze the principal elements in the situation.
B)  recognize an ethical situation.
C)  identify the alternatives and weigh the impact of each alternative on stakeholders.
D)  recognize the ethical issues involved.

Question 20

Which of the following will not cause a change in the stockholders' equity of a business?

Accepted Answer

A)  An increase in prepaid expenses.
B)  An increase in retained earnings.
C)  The sale of common stock.
D)  The declaration and payment of dividends.

Exam 1: Accounting in Action

The origins of accounting are attributed to Luca Pacioli, a famous mathematician.

Correct Answer
verified

Stockholders' equity is often referred to as

Correct Answer
verified

Martin Corporation purchased land in 2007 for $290,000. In 2015, it purchased a nearly identical parcel of land for $460,000. In its 2015 balance sheet, Martin valued these two parcels of land at a combined value of $920,000. By reporting the land in this manner, Martin Corp. has violated the

Correct Answer
verified

Correct Answer
verified

The ending retained earnings balance is reported on both the retained earnings statement and the balance sheet.

Correct Answer
verified

The final step in solving an ethical dilemma is to

Correct Answer
verified

A dividend is

Correct Answer
verified

Financial statements are the major means of communicating accounting information to interested parties.

Correct Answer
verified

Which of the following will not cause a change in the stockholders' equity of a business?

Correct Answer
verified

At the time an asset is acquired, cost and fair value should be the same.

Correct Answer
verified

A partnership must have more than one owner.

Correct Answer
verified

Correct Answer
verified

The balance sheet is frequently referred to as

Correct Answer
verified

Liabilities of a company would not include

Correct Answer
verified

In order to possess future service potential, an asset must have physical substance.

Correct Answer
verified

Preparing tax returns and engaging in tax planning is performed by

Correct Answer
verified

A net loss will result during a time period when

Correct Answer
verified

Druganaut Company buys a $21,000 van on credit. The transaction will affect the

Correct Answer
verified

Financial information that is capable of making a difference in a decision is

Correct Answer
verified

As of June 30, 2015, Actual Tigers Company has assets of $100,000 and stockholders' equity of $40,000. What are the liabilities for Actual Tigers Company as of June 30, 2015?

Correct Answer
verified

Exam 1: Accounting in Action

The origins of accounting are attributed to Luca Pacioli, a famous mathematician.

Correct AnswerverifiedShow Answer

Stockholders' equity is often referred to as

Correct AnswerverifiedShow Answer

Martin Corporation purchased land in 2007 for $290,000. In 2015, it purchased a nearly identical parcel of land for $460,000. In its 2015 balance sheet, Martin valued these two parcels of land at a combined value of $920,000. By reporting the land in this manner, Martin Corp. has violated the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The ending retained earnings balance is reported on both the retained earnings statement and the balance sheet.

Correct AnswerverifiedShow Answer

The final step in solving an ethical dilemma is to

Correct AnswerverifiedShow Answer

A dividend is

Correct AnswerverifiedShow Answer

Financial statements are the major means of communicating accounting information to interested parties.

Correct AnswerverifiedShow Answer

Which of the following will not cause a change in the stockholders' equity of a business?

Correct AnswerverifiedShow Answer

At the time an asset is acquired, cost and fair value should be the same.

Correct AnswerverifiedShow Answer

A partnership must have more than one owner.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The balance sheet is frequently referred to as

Correct AnswerverifiedShow Answer

Liabilities of a company would not include

Correct AnswerverifiedShow Answer

In order to possess future service potential, an asset must have physical substance.

Correct AnswerverifiedShow Answer

Preparing tax returns and engaging in tax planning is performed by

Correct AnswerverifiedShow Answer

A net loss will result during a time period when

Correct AnswerverifiedShow Answer

Druganaut Company buys a $21,000 van on credit. The transaction will affect the

Correct AnswerverifiedShow Answer

Financial information that is capable of making a difference in a decision is

Correct AnswerverifiedShow Answer

As of June 30, 2015, Actual Tigers Company has assets of $100,000 and stockholders' equity of $40,000. What are the liabilities for Actual Tigers Company as of June 30, 2015?

Correct AnswerverifiedShow Answer

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