Question 1

Liabilities are defined as "the residual interest in the assets of an entity that remains after deducting its equity".

Accepted Answer

A) True 
 B)False

Question 2

Describe source documents and their purpose.

Accepted Answer

Source documents are the business papers...

Question 3

The first section of the income statement reports cash from operating activities.

Accepted Answer

A) True 
 B)False

Question 4

Before purchasing a parcel of land, Ming's Boutique had the land appraised at $90,000. The management of Ming's Boutique purchased the land for $85,000. At what amount should the land be recorded on Ming's Boutique's books? What accounting principle supports your answer?

Accepted Answer

$85,000. The Historical cost p...

Question 5

Items such as sales slips, invoices, cheques, purchase orders, and employee earnings records are also called source documents.

Accepted Answer

A) True 
 B)False

Question 6

An owner's cash investment in a business creates an asset (cash), a liability (note payable), and equity (owner investments).

Accepted Answer

A) True 
 B)False

Question 7

Describe the main user groups, their members, and their uses of accounting information.

Accepted Answer

There are two types of users of accounti...

Question 8

The question of when revenue should be recognized on the income statement (according to GAAP)  is answered by the

Accepted Answer

A)   revenue recognition principle
B)   going concern principle
C)   currency principle
D)   business entity principle
E)   historical cost principle

Question 9

A characteristic of liabilities is their capacity to reduce future assets.

Accepted Answer

A) True 
 B)False

Question 10

Transactions that impact only assets do not require the accounting equation to stay in balance.

Accepted Answer

A) True 
 B)False

Question 11

Costs incurred or the using up of assets as a result of the main operations of a business are called

Accepted Answer

A)   liabilities
B)   equity
C)   revenues
D)   expenses
E)   net losses

Question 12

Properties or economic resources owned by a business, also described as probable future economic benefits, are called

Accepted Answer

A)   assets
B)   revenues
C)   liabilities
D)   equity
E)   expenses

Question 13

Recordkeeping" is another term for "accounting".

Accepted Answer

A) True 
 B)False

Question 14

If assets are $175,000 and equity is $47,000, then liabilities equal

Accepted Answer

A)   $47,000
B)   $128,000
C)   $175,000
D)   $204,000
E)   $222,000

Question 15

Sheila's Attic has $660,000 in assets and equity of $250,000. What is the amount of its liabilities?

Accepted Answer

The answer of Sheila's Attic has $660,000 in assets and...

Question 16

You are reviewing the accounting records of April's Attic, owned by April Lapierre. You have uncovered the following situations. Compose a memo to Ms. Lapierre. Cite the appropriate accounting principle and suggest an action for each separate item.

Accepted Answer

The answer of You are reviewing the accounting records of...

Question 17

Private accountants work for several employers.

Accepted Answer

A) True 
 B)False

Question 18

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 specific time period
C)   the types and amounts of assets, liabilities, and equity of a business at a specific date
D)   the inflows and outflows of cash during a specific time period
E)   the assets and liabilities of a business but not the equity

Question 19

The equity in a partnership belongs to one owner.

Accepted Answer

A) True 
 B)False

Question 20

Celery Company has assets of $150,000, liabilities of $90,000, and equity of $60,000. It buys supplies for cash $5,000. What effect would this transaction have on the accounting equation?

Accepted Answer

A)   Assets, $5,000 increase, equity, $5,000 increase.
B)   Assets, $5,000 increase, equity, $5,000 decrease.
C)   Liabilities, $5,000 increase, equity, $5,000 decrease.
D)   Assets, $5,000 decrease, equity, $5,000 decrease.
E)   Assets, no effect; liabilities, no effect

Exam 1: Accounting in Business

Describe the main user groups, their members, and their uses of accounting information.

Correct AnswerverifiedThere are two types of users of accounti...View AnswerShow Answer

Liabilities are defined as "the residual interest in the assets of an entity that remains after deducting its equity".

Correct AnswerverifiedShow Answer

The question of when revenue should be recognized on the income statement (according to GAAP) is answered by the

Correct AnswerverifiedShow Answer

Celery Company has assets of $150,000, liabilities of $90,000, and equity of $60,000. It buys supplies for cash $5,000. What effect would this transaction have on the accounting equation?

Correct AnswerverifiedShow Answer

Before purchasing a parcel of land, Ming's Boutique had the land appraised at $90,000. The management of Ming's Boutique purchased the land for $85,000. At what amount should the land be recorded on Ming's Boutique's books? What accounting principle supports your answer?

Correct Answerverified$85,000. The Historical cost p...View AnswerShow Answer

Costs incurred or the using up of assets as a result of the main operations of a business are called

Correct AnswerverifiedShow Answer

Sheila's Attic has $660,000 in assets and equity of $250,000. What is the amount of its liabilities?

Correct AnswerverifiedShow Answer

A characteristic of liabilities is their capacity to reduce future assets.

Correct AnswerverifiedShow Answer

Transactions that impact only assets do not require the accounting equation to stay in balance.

Correct AnswerverifiedShow Answer

Properties or economic resources owned by a business, also described as probable future economic benefits, are called

Correct AnswerverifiedShow Answer

The equity in a partnership belongs to one owner.

Correct AnswerverifiedShow Answer

The first section of the income statement reports cash from operating activities.

Correct AnswerverifiedShow Answer

Items such as sales slips, invoices, cheques, purchase orders, and employee earnings records are also called source documents.

Correct AnswerverifiedShow Answer

An owner's cash investment in a business creates an asset (cash), a liability (note payable), and equity (owner investments).

Correct AnswerverifiedShow Answer

If assets are $175,000 and equity is $47,000, then liabilities equal

Correct AnswerverifiedShow Answer

You are reviewing the accounting records of April's Attic, owned by April Lapierre. You have uncovered the following situations. Compose a memo to Ms. Lapierre. Cite the appropriate accounting principle and suggest an action for each separate item.

Correct AnswerverifiedShow Answer

A balance sheet lists

Correct AnswerverifiedShow Answer

Private accountants work for several employers.

Correct AnswerverifiedShow Answer

Describe source documents and their purpose.

Correct AnswerverifiedSource documents are the business papers...View AnswerShow Answer

Recordkeeping" is another term for "accounting".

Correct AnswerverifiedShow Answer

Correct Answer
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There are two types of users of accounti...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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$85,000. The Historical cost p...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Source documents are the business papers...
View Answer

Correct Answer
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