Question 1

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Accepted Answer

A) True 
 B)False

Question 2

The primary objective of financial accounting is to:

Accepted Answer

A)   Provide accounting information that serves external users.
B)   Serve the decision-making needs of internal users.
C)   Monitor and control company activities.
D)   Provide information on both the costs and benefits of looking after products and services.
E)   Know what, when, and how much product to produce.

Question 3

There are at least three types of partnerships that limit the partners' liability. They are 1)________, 2) ________, and 3)________.

Accepted Answer

limited partnership,...

Question 4

The materiality constraint:

Accepted Answer

A)   Prescribes that only information that would influence the decisions of a reasonable person need be disclosed.
B)   Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
C)   Provides guidance on when a company must recognize revenue.
D)   Prescribes that accounting information is based on actual cost.
E)   Prescribes that a company record the expenses it incurred to generate the revenue reported.

Question 5

Data for Kennedy Realty are as follows:
 $$\begin{array} {| l | l |} 
\hline\text { Total asets at January } 1 & \$ 100,000 \
\hline \text { Total liabilities at January } 1 & 35,000 \
\hline \text { Total revenues for the year } & 79,000 \
\hline \text { Total expenses for the year } & 47,000 \
\hline
\end{array}$$  The owner, Finn Kennedy, withdrew a total of $30,000 for personal use during the year. Using the above data, prepare Kennedy Realty's Statement of Owner's Equity for the year ended December 31.

Accepted Answer

KENNEDY REALTY
Statement of Owner's Equi...

Question 6

Match between columns
                        Premises:  An information and measurement system that identifies, records and communicates relevant reliable and comparable information about an organization's business activities.
 The part of accounting that involves recording transactions and events, either electronically or manually.
 Persons using accounting information who are not directly involved in running the organization.
 Persons using accounting information who are directly involved in managing and operating the organization.
 The area of accounting that serves the decision-making needs of internal users.
 The area of accounting aimed at serving external users by providing them with general-purpose financial statements.
 Accounting specialists that have met educational and experience requirements, passed an examination and exhibit ethical characteristics to achieve a professional certification.
 Beliefs that distinguish right from wrong, considered accepted standards of good and bad behavior.
 A model that asserts the factors that must exist for a person to commit fraud.

Accepted Answer

The Answer of Financial accounting and Ethics and Recordkeeping and is...

Question 7

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Accepted Answer

A)   20.0%.
B)   6.7%.
C)   7.1%.
D)   18.8%.
E)   7.5%.

Question 8

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Accepted Answer

A)   SEC.
B)   AAA.
C)   AICPA.
D)   APB.
E)   FASB.

Question 9

U.S. Government Treasury bonds provide low return and low risk to investors.

Accepted Answer

A) True 
 B)False

Question 10

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Accepted Answer

A)   $97,000.
B)   $38,000.
C)   $88,000.
D)   $47,000.
E)   $25,000.

Question 11

How does the going-concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f...

Question 12

If assets are $300,000 and liabilities are $192,000, then equity equals:

Accepted Answer

A)   $492,000.
B)   $792,000.
C)   $108,000.
D)   $300,000.
E)   $192,000.

Question 13

If assets are $365,000 and equity is $120,000, then liabilities are:

Accepted Answer

A)   $365,000.
B)   $245,000.
C)   $610,000.
D)   $120,000.
E)   $485,000.

Question 14

Classify the following activities according to the appropriate section of the statement of cash flows.
a. Operating activity
b. Investing activity
c. Financing activity
1. Cash received from a one-time sale of used office equipment.
____ 2. Cash paid for withdrawals by owners.
____ 3. Cash received from customers.
____ 4. Cash received from owner contributions.
____ 5. Cash paid for utilities.
____ 6. Cash paid for a delivery van to be used in the business.

Accepted Answer

1. B; 2. C...

Question 15

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income.

Accepted Answer

A)   $49,000.
B)   $64,000.
C)   $19,000.
D)   $30,000.
E)   $83,000.

Question 16

What is the balance sheet? What is its purpose?

Accepted Answer

The balance sheet is one of the four req...

Question 17

Speedy has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

Accepted Answer

A)   7.7%.
B)   13.0%.
C)   8.5%.
D)   9.5%.
E)   11.8%.

Question 18

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Accepted Answer

A) True 
 B)False

Question 19

An owner's investment increases equity via net income.

Accepted Answer

A) True 
 B)False

Question 20

Cragmont has beginning equity of $277,000, net income of $63,000, withdrawals of $25,000 and no additional investments by owners during the period. Its ending equity is:

Accepted Answer

A)   $189,000.
B)   $315,000.
C)   $365,000.
D)   $239,000.
E)   $277,000.

Exam 1: Accounting in Business

What is the balance sheet? What is its purpose?

Correct Answer
verified
The balance sheet is one of the four req...
View Answer

Correct Answer
verified
KENNEDY REALTY
Statement of Owner's Equi...
View Answer

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income.

Correct Answer
verified

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Correct Answer
verified

If assets are $300,000 and liabilities are $192,000, then equity equals:

Correct Answer
verified

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Correct Answer
verified

Speedy has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

Correct Answer
verified

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Correct Answer
verified

Correct Answer
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1. B; 2. C...
View Answer

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Correct Answer
verified

The materiality constraint:

Correct Answer
verified

Cragmont has beginning equity of $277,000, net income of $63,000, withdrawals of $25,000 and no additional investments by owners during the period. Its ending equity is:

Correct Answer
verified

The primary objective of financial accounting is to:

Correct Answer
verified

There are at least three types of partnerships that limit the partners' liability. They are 1), 2) , and 3).

Correct Answer
verified
limited partnership,...
View Answer

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Correct Answer
verified

An owner's investment increases equity via net income.

Correct Answer
verified

How does the going-concern principle affect reporting asset values of a business?

Correct Answer
verified
The going-concern principle means that f...
View Answer

Match the following definitions with the appropriate term

U.S. Government Treasury bonds provide low return and low risk to investors.

Correct Answer
verified

If assets are $365,000 and equity is $120,000, then liabilities are:

Correct Answer
verified

Exam 1: Accounting in Business

What is the balance sheet? What is its purpose?

Correct AnswerverifiedThe balance sheet is one of the four req...View AnswerShow Answer

Correct AnswerverifiedKENNEDY REALTYStatement of Owner's Equi...View AnswerShow Answer

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income.

Correct AnswerverifiedShow Answer

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Correct AnswerverifiedShow Answer

If assets are $300,000 and liabilities are $192,000, then equity equals:

Correct AnswerverifiedShow Answer

From an accounting perspective, an event is a happening that affects the accounting equation, but cannot be measured.

Correct AnswerverifiedShow Answer

Speedy has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

Correct AnswerverifiedShow Answer

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

Correct AnswerverifiedShow Answer

Correct Answerverified1. B; 2. C...View AnswerShow Answer

Investing activities involve the buying and selling of assets such as land and equipment that are held for long-term use in the business.

Correct AnswerverifiedShow Answer

The materiality constraint:

Correct AnswerverifiedShow Answer

Cragmont has beginning equity of $277,000, net income of $63,000, withdrawals of $25,000 and no additional investments by owners during the period. Its ending equity is:

Correct AnswerverifiedShow Answer

The primary objective of financial accounting is to:

Correct AnswerverifiedShow Answer

There are at least three types of partnerships that limit the partners' liability. They are 1)________, 2) ________, and 3)________.

Correct Answerverifiedlimited partnership,...View AnswerShow Answer

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Correct AnswerverifiedShow Answer

An owner's investment increases equity via net income.

Correct AnswerverifiedShow Answer

How does the going-concern principle affect reporting asset values of a business?

Correct AnswerverifiedThe going-concern principle means that f...View AnswerShow Answer

Match the following definitions with the appropriate term

U.S. Government Treasury bonds provide low return and low risk to investors.

Correct AnswerverifiedShow Answer

If assets are $365,000 and equity is $120,000, then liabilities are:

Correct AnswerverifiedShow Answer

Correct Answer
verified
The balance sheet is one of the four req...
View Answer

Correct Answer
verified
KENNEDY REALTY
Statement of Owner's Equi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1. B; 2. C...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

There are at least three types of partnerships that limit the partners' liability. They are 1), 2) , and 3).

Correct Answer
verified
limited partnership,...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The going-concern principle means that f...
View Answer

Correct Answer
verified

Correct Answer
verified