Question 1

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Accepted Answer

A) True 
 B)False

Question 2

The financial statement that shows the beginning balance of retained earnings; the changes in equity that resulted from net income (or net loss) ; dividends; and the ending retained earnings balance,is the:

Accepted Answer

A)   Statement of financial position.
B)   Statement of cash flows.
C)   Balance sheet.
D)   Income statement.
E)   Statement of retained earnings.F) None of the above
G) A) and B)

Question 3

At the beginning of the year,a company had $120,000 worth of liabilities.During the year,assets increased by $160,000 and at year-end they equaled $360,000.Liabilities decreased $20,000 during the year.Calculate the beginning and ending values of equity.

Accepted Answer

Beginning equity = $...

Question 4

Dividends paid to stockholders are subtracted in the calculation of net income,as expenses.

Accepted Answer

A) True 
 B)False

Question 5

________ is an information and measurement system that identifies,records and communicates relevant,reliable and comparable information about an organization's economic activities.

Accepted Answer

The answer of ________ is an information and measurement system...

Question 6

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Accepted Answer

A) True 
 B)False

Question 7

The materiality constraint:

Accepted Answer

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

Question 8

Match each of the following terms with the most appropriate definition.
-Creditor's claims on a company's assets.

Accepted Answer

A)  Assets
B)  Expenses
C)  Return on assets
D)  Accounting equation
E)  RiskF) Common stockG) DividendsH) LiabilitiesI) B) and H)
J) None of the above

Question 9

Billington Corp.borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

Accepted Answer

A)   Assets would decrease $80,000 and liabilities would decrease $80,000.
B)   Assets would decrease $80,000 and equity would increase $80,000.
C)   Assets would increase $80,000 and equity would decrease $80,000.
D)   Assets would increase $80,000 and liabilities would increase $80,000.
E)   Liabilities would decrease $80,000 and equity would increase $80,000.F) A) and E)
G) B) and C)

Question 10

What is the balance sheet? What is its purpose?

Accepted Answer

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

Question 11

A partnership is a business owned by two or more people.

Accepted Answer

A) True 
 B)False

Question 12

An accounting system captures relevant data about transactions and then classifies,records,and reports data.

Accepted Answer

A) True 
 B)False

Question 13

Operating activities include long-term borrowing and repaying cash from lenders,and cash investments by or dividends paid to stockholders.

Accepted Answer

A) True 
 B)False

Question 14

If assets are $99,000 and liabilities are $32,000,then equity equals:

Accepted Answer

A)   $32,000.
B)   $67,000.
C)   $99,000.
D)   $131,000.
E)   $198,000.F) A) and D)
G) None of the above

Question 15

All of the following are classified as assets except:

Accepted Answer

A)   Accounts Receivable.
B)   Supplies.
C)   Equipment.
D)   Accounts Payable.
E)   Land.F) A) and D)
G) B) and D)

Question 16

A balance sheet lists:

Accepted Answer

A)   The types and amounts of the revenues and expenses of a business.
B)   Only the information about what happened to equity during a time period.
C)   The types and amounts of assets, liabilities, and equity of a business as of a specific date.
D)   The inflows and outflows of cash during the period.
E)   The assets and liabilities of a company but not the stockholders'equity.F) B) and D)
G) All of the above

Question 17

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 18

Match the following terms with the appropriate definition.
-The part of accounting that involves recording transactions and events,either electronically or manually.

Accepted Answer

A)  Internal users
B)  Fraud triangle
C)  Managerial accounting
D)  Ethics
E)  External usersF) Certified Public Accountant (CP
A)  G) Financial accountingH) AccountingI) RecordkeepingJ) A) and I)
K) A) and B)

Question 19

Resources that stockholders receive from the company is called a(n) :

Accepted Answer

A)   Liability.
B)   Dividend.
C)   Expense.
D)   Common Stock.
E)   Investment.F) None of the above
G) C) and D)

Question 20

Cash investments by stockholders are listed on which of the following statement(s) ?

Accepted Answer

A)   Balance sheet.
B)   Income statement.
C)   Statement of retained earnings only.
D)   Statement of cash flows only.
E)   Statement of retained earnings and statement of cash flows.F) A) and E)
G) B) and C)

Exam 1: Accounting in Business

A partnership is a business owned by two or more people.

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If assets are $99,000 and liabilities are $32,000,then equity equals:

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The financial statement that shows the beginning balance of retained earnings; the changes in equity that resulted from net income (or net loss) ; dividends; and the ending retained earnings balance,is the:

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The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

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Billington Corp.borrows $80,000 cash from Second National Bank.How does this transaction affect the accounting equation for Billington?

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The materiality constraint:

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At the beginning of the year,a company had $120,000 worth of liabilities.During the year,assets increased by $160,000 and at year-end they equaled $360,000.Liabilities decreased $20,000 during the year.Calculate the beginning and ending values of equity.

Correct AnswerverifiedBeginning equity = $...View AnswerShow Answer

Operating activities include long-term borrowing and repaying cash from lenders,and cash investments by or dividends paid to stockholders.

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A balance sheet lists:

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Match each of the following terms with the most appropriate definition. -Creditor's claims on a company's assets.

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All of the following are classified as assets except:

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Cash investments by stockholders are listed on which of the following statement(s) ?

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The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

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An accounting system captures relevant data about transactions and then classifies,records,and reports data.

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Resources that stockholders receive from the company is called a(n) :

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Match the following terms with the appropriate definition. -The part of accounting that involves recording transactions and events,either electronically or manually.

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What is the balance sheet? What is its purpose?

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

________ is an information and measurement system that identifies,records and communicates relevant,reliable and comparable information about an organization's economic activities.

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

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Dividends paid to stockholders are subtracted in the calculation of net income,as expenses.

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Beginning equity = $...
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The balance sheet is one of the four req...
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