Question 1

If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by the purchaser as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at:

Accepted Answer

A)  $95,000.
B)  $137,000.
C)  $138,500.
D)  $140,000.
E)  $150,000.F) B) and D)
G) None of the above

Question 2

The basic financial statements include all of the following except:

Accepted Answer

A)  Balance Sheet.
B)  Income Statement.
C)  Statement of Retained Earnings.
D)  Statement of Cash Flows.
E)  Statement of Changes in Assets.F) B) and C)
G) A) and E)

Question 3

What distinguishes liabilities from equity?

Accepted Answer

Liabilities are creditors' claims on ass...

Question 4

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 5

A ____________________ is a business that is owned by only one person.

Accepted Answer

The answer of A ____________________ is a business that is...

Question 6

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) C) and E)
G) A) and C)

Question 7

Creditors' claims on the assets of a company are called:

Accepted Answer

A)  Net losses.
B)  Expenses.
C)  Revenues.
D)  Equity.
E)  Liabilities.F) B) and C)
G) A) and E)

Question 8

Identifying the proper ethical path is usually easy.

Accepted Answer

A) True 
 B)False

Question 9

General accounting principles arise from long-used accounting practices.

Accepted Answer

A) True 
 B)False

Question 10

Common stock is an increase in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 11

Owner financing refers to resources contributed by creditors or lenders.

Accepted Answer

A) True 
 B)False

Question 12

Decreases in equity that represent costs of providing products or services to customers, used to earn revenues are called:

Accepted Answer

A)  Liabilities.
B)  Equity.
C)  Dividends.
D)  Expenses.
E)  Common Stock.F) None of the above
G) D) and E)

Question 13

An exchange of value between two entities that yields a change in the accounting equation is called:

Accepted Answer

A)  The accounting equation.
B)  Recordkeeping or bookkeeping.
C)  An external transaction.
D)  An asset.
E)  Net Income.F) C) and E)
G) A) and C)

Question 14

The ____________________ describes a company's revenues and expenses along with the resulting net income or net loss over a period of time due to earnings activities.

Accepted Answer

The answer of The ____________________ describes a company's revenues and...

Question 15

Increases in equity from a company's sales of products or services are:

Accepted Answer

A)  Assets.
B)  Revenues.
C)  Liabilities.
D)  Stockholders' Equity.
E)  Expenses.F) None of the above
G) C) and E)

Question 16

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Contessa Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

Accepted Answer

A)  Total assets decrease and equity increases.
B)  Both total assets and total liabilities decrease.
C)  Neither assets, total liabilities, nor equity are changed.
D)  Both total assets and equity are unchanged and liabilities increase.
E)  Total assets increase and equity decreases.F) C) and D)
G) D) and E)

Exam 1: Accounting in Business

A ____________________ is a business that is owned by only one person.

Correct Answer
verified

General accounting principles arise from long-used accounting practices.

Correct Answer
verified

Owner financing refers to resources contributed by creditors or lenders.

Correct Answer
verified

An exchange of value between two entities that yields a change in the accounting equation is called:

Correct Answer
verified

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Correct Answer
verified

Decreases in equity that represent costs of providing products or services to customers, used to earn revenues are called:

Correct Answer
verified

The ____________________ describes a company's revenues and expenses along with the resulting net income or net loss over a period of time due to earnings activities.

Correct Answer
verified

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Correct Answer
verified

Identifying the proper ethical path is usually easy.

Correct Answer
verified

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

Correct Answer
verified

Contessa Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

Correct Answer
verified

Creditors' claims on the assets of a company are called:

Correct Answer
verified

Increases in equity from a company's sales of products or services are:

Correct Answer
verified

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

Correct Answer
verified

What distinguishes liabilities from equity?

Correct Answer
verified
Liabilities are creditors' claims on ass...
View Answer

Common stock is an increase in equity from a company's earnings activities.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The basic financial statements include all of the following except:

Correct Answer
verified

Exam 1: Accounting in Business

A ____________________ is a business that is owned by only one person.

Correct AnswerverifiedShow Answer

General accounting principles arise from long-used accounting practices.

Correct AnswerverifiedShow Answer

Owner financing refers to resources contributed by creditors or lenders.

Correct AnswerverifiedShow Answer

An exchange of value between two entities that yields a change in the accounting equation is called:

Correct AnswerverifiedShow Answer

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Correct AnswerverifiedShow Answer

Decreases in equity that represent costs of providing products or services to customers, used to earn revenues are called:

Correct AnswerverifiedShow Answer

The ____________________ describes a company's revenues and expenses along with the resulting net income or net loss over a period of time due to earnings activities.

Correct AnswerverifiedShow Answer

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Correct AnswerverifiedShow Answer

Identifying the proper ethical path is usually easy.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Contessa Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are:

Correct AnswerverifiedShow Answer

Creditors' claims on the assets of a company are called:

Correct AnswerverifiedShow Answer

Increases in equity from a company's sales of products or services are:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What distinguishes liabilities from equity?

Correct AnswerverifiedLiabilities are creditors' claims on ass...View AnswerShow Answer

Common stock is an increase in equity from a company's earnings activities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The basic financial statements include all of the following except:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Liabilities are creditors' claims on ass...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified