Question 1

Alpha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Accepted Answer

A)  Assets increase by $75,000 and expenses increase by $75,000.
B)  Assets increase by $75,000 and expenses decrease by $75,000.
C)  Liabilities increase by $75,000 and expenses decrease by $75,000.
D)  Assets decrease by $75,000 and expenses decrease by $75,000.
E)  Assets increase by $75,000 and liabilities increase by $75,000.

Question 2

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Accepted Answer

A) True 
 B)False

Question 3

Accounts payable appear on which of the following statements?

Accepted Answer

A)  Balance sheet.
B)  Income statement.
C)  Statement of retained earnings.
D)  Statement of cash flows.
E)  Transaction statement.

Question 4

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 5

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities.Which of the following transactions could have caused that effect?

Accepted Answer

A)  Cash was received from providing services to a customer.
B)  Cash was received as a stockholder investment.
C)  Equipment was purchased on credit.
D)  Supplies were purchased for cash.
E)  Advertising expense for the month was paid in cash.

Question 6

Stockholders' equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

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.

Question 8

The accounting concept that requires every business to be accounted for separately from other business entities,including its owner or owners is known as the:

Accepted Answer

A)  Time-period assumption.
B)  Business entity assumption.
C)  Going-concern assumption.
D)  Revenue recognition principle.
E)  Measurement (Cost) principle.

Question 9

Internal users include lenders,shareholders,brokers and nonexecutive employees.

Accepted Answer

A) True 
 B)False

Question 10

Describe the three important guidelines for revenue recognition.

Accepted Answer

The three important guidelines for reven...

Question 11

Accounting is an information and measurement system that does all of the following except:

Accepted Answer

A)  Identifies business activities.
B)  Records business activities.
C)  Communicates business activities.
D)  Eliminates the need for interpreting financial data.
E)  Helps people make better decisions.

Question 12

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 13

Operating activities:

Accepted Answer

A)  Are the means organizations use to pay for resources like land,buildings and equipment.
B)  Involve using resources to research,develop,purchase,produce,distribute and market products and services.
C)  Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services.
D)  Are also called asset management.
E)  Are also called strategic management.

Question 14

Prepare a December 31 balance sheet in proper form for Smokey River Supplies from the following list of the accounts:

Accepted Answer

The answer of Prepare a December 31 balance sheet in...

Question 15

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and dividends to stockholders of $9,000.There were no stockholder investments during the year.Calculate ending equity.

Accepted Answer

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

Question 16

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

Accepted Answer

A)  Income statement equation.
B)  Accounting equation.
C)  Business equation.
D)  Return on equity ratio.
E)  Net income.

Question 17

The Financial Accounting Standards Board (FASB) conceptual framework consists broadly of all of the following except:

Accepted Answer

A)  Objectives
B)  Qualitative characteristics
C)  Uniformity
D)  Elements
E)  Recognition and measurement

Exam 1: Introducing Financial Statements

The Financial Accounting Standards Board (FASB) conceptual framework consists broadly of all of the following except:

Correct Answer
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Describe the three important guidelines for revenue recognition.

Correct Answer
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The three important guidelines for reven...
View Answer

The accounting concept that requires every business to be accounted for separately from other business entities,including its owner or owners is known as the:

Correct Answer
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Internal users include lenders,shareholders,brokers and nonexecutive employees.

Correct Answer
verified

The materiality constraint:

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

Correct Answer
verified

Alpha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Correct Answer
verified

Prepare a December 31 balance sheet in proper form for Smokey River Supplies from the following list of the accounts:

Correct Answer
verified

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

Correct Answer
verified

Accounts payable appear on which of the following statements?

Correct Answer
verified

Stockholders' equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

Correct Answer
verified

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Correct Answer
verified

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities.Which of the following transactions could have caused that effect?

Correct Answer
verified

Operating activities:

Correct Answer
verified

Accounting is an information and measurement system that does all of the following except:

Correct Answer
verified

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

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and dividends to stockholders of $9,000.There were no stockholder investments during the year.Calculate ending equity.

Correct Answer
verified

Exam 1: Introducing Financial Statements

The Financial Accounting Standards Board (FASB) conceptual framework consists broadly of all of the following except:

Correct AnswerverifiedShow Answer

Describe the three important guidelines for revenue recognition.

Correct AnswerverifiedThe three important guidelines for reven...View AnswerShow Answer

The accounting concept that requires every business to be accounted for separately from other business entities,including its owner or owners is known as the:

Correct AnswerverifiedShow Answer

Internal users include lenders,shareholders,brokers and nonexecutive employees.

Correct AnswerverifiedShow Answer

The materiality constraint:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Alpha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Correct AnswerverifiedShow Answer

Prepare a December 31 balance sheet in proper form for Smokey River Supplies from the following list of the accounts:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Accounts payable appear on which of the following statements?

Correct AnswerverifiedShow Answer

Stockholders' equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

Correct AnswerverifiedShow Answer

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Correct AnswerverifiedShow Answer

The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities.Which of the following transactions could have caused that effect?

Correct AnswerverifiedShow Answer

Operating activities:

Correct AnswerverifiedShow Answer

Accounting is an information and measurement system that does all of the following except:

Correct AnswerverifiedShow 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

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and dividends to stockholders of $9,000.There were no stockholder investments during the year.Calculate ending equity.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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The three important guidelines for reven...
View 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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