Question 1

Regulators often have legal authority over certain activities of organizations.

Accepted Answer

A) True 
 B)False

Question 2

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Accepted Answer

A) True 
 B)False

Question 3

Rushing had income of $150 million and average invested assets of $1,800 million.Its return on assets is:

Accepted Answer

A)   8.3%.
B)   83.3%.
C)   12%.
D)   120%.
E)   16.7%.F) C) and D)
G) A) and C)

Question 4

Match the following terms with the appropriate definition.
-Business entity principle

Accepted Answer

A)  The principle that assumes transactions and events can be expressed in money units.
B)  The cost of assets or services used to earn revenue.
C)  The principle that requires a business to be accounted for separately from its owners.
D)  Describes a company's revenues and expenses along with the resulting net income or loss over a period of time.
E)  Creditor's claims on assets.F) The relation between a company's assets, liabilities, and equity.G) The principle that revenue is recorded when earned through providing goods or services.H) A financial statement that lists cash inflows (receipts)  and cash outflows (payments) ; the cash flows are arranged by operating, investing, and financing activities.I) Happenings, such as changes in market value, that effect the accounting equation and are reliably measured.J) C) and H)
K) C) and D)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The income statement reports on operating activities at a point in time.

Accepted Answer

A) True 
 B)False

Question 7

Match the following activities with the appropriate section of the statement of cash flows.
-Cash dividends paid to stockholders.

Accepted Answer

A)  Financing activity
B)  Investing activity
C)  Operating activityD) None of the above
E) All of the above

Question 8

Describe the income statement and the relation between revenues,expenses,and net income or loss.

Accepted Answer

The income statement describes a company...

Question 9

Identify several opportunities in accounting and distinguish between private accounting and public accounting.

Accepted Answer

The four broad areas of accounting are f...

Question 10

Match the following activities with the appropriate section of the statement of cash flows.
-Cash paid for utilities.

Accepted Answer

A)  Financing activity
B)  Investing activity
C)  Operating activityD) B) and C)
E) All of the above

Question 11

Match each of the following terms with the most appropriate definition.
-Expresses the relation of assets,liabilities and equity in a company,comparing the resources the company owns to the sources of funds to acquire the resources.

Accepted Answer

A)  Assets
B)  Expenses
C)  Return on assets
D)  Accounting equation
E)  RiskF) Common stockG) DividendsH) LiabilitiesI) C) and E)
J) A) and G)

Question 12

The Sarbanes-Oxley Act (SOX)requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Accepted Answer

A) True 
 B)False

Question 13

If a company receives $12,000 from its sole stockholder to establish a corporation,the effect on the accounting equation would be:

Accepted Answer

A)   Assets decrease $12,000 and equity decreases $12,000.
B)   Assets increase $12,000 and liabilities decrease $12,000.
C)   Assets increase $12,000 and liabilities increase $12,000.
D)   Liabilities increase $12,000 and equity decreases $12,000.
E)   Assets increase $12,000 and equity increases $12,000.F) C) and D)
G) All of the above

Question 14

Describe the three important guidelines for revenue recognition.

Accepted Answer

The three important guidelines for reven...

Question 15

________ are beliefs that separate right from wrong and are considered accepted standards of good and bad behavior.

Accepted Answer

The answer of ________ are beliefs that separate right from...

Question 16

If a company uses $1,300 of its cash to purchase supplies,the effect on the accounting equation would be:

Accepted Answer

A)   Assets increase $1,300 and liabilities decrease $1,300.
B)   One asset increases $1,300 and another asset decreases $1,300, causing no effect.
C)   Assets decrease $1,300 and equity decreases $1,300.
D)   Assets decrease $1,300 and equity increases $1,300.
E)   Assets increase $1,300 and liabilities increase $1,300.F) All of the above
G) D) and E)

Question 17

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

Accepted Answer

A) True 
 B)False

Question 18

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.F) B) and E)
G) A) and D)

Question 19

A disadvantage of a sole proprietorship is the fact that the owner has ________.

Accepted Answer

The answer of A disadvantage of a sole proprietorship is...

Question 20

Owner claims on assets,also known as net assets,is called ________.

Accepted Answer

The answer of Owner claims on assets,also known as net...

Exam 1: Accounting in Business

Match the following activities with the appropriate section of the statement of cash flows. -Cash paid for utilities.

Correct AnswerverifiedShow Answer

If a company receives $12,000 from its sole stockholder to establish a corporation,the effect on the accounting equation would be:

Correct AnswerverifiedShow Answer

A disadvantage of a sole proprietorship is the fact that the owner has ________.

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

Return on assets reflects a company's ability to generate profit through productive use of its assets.

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition. -Business entity principle

Correct AnswerverifiedShow Answer

Identify several opportunities in accounting and distinguish between private accounting and public accounting.

Correct AnswerverifiedThe four broad areas of accounting are f...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Match the following activities with the appropriate section of the statement of cash flows. -Cash dividends paid to stockholders.

Correct AnswerverifiedShow Answer

Rushing had income of $150 million and average invested assets of $1,800 million.Its return on assets is:

Correct AnswerverifiedShow Answer

Match each of the following terms with the most appropriate definition. -Expresses the relation of assets,liabilities and equity in a company,comparing the resources the company owns to the sources of funds to acquire the resources.

Correct AnswerverifiedShow Answer

________ are beliefs that separate right from wrong and are considered accepted standards of good and bad behavior.

Correct AnswerverifiedShow Answer

The income statement reports on operating activities at a point in time.

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission (SEC)is a government agency that has legal authority to establish GAAP.

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act (SOX)requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Correct AnswerverifiedShow Answer

If a company uses $1,300 of its cash to purchase supplies,the effect on the accounting equation would be:

Correct AnswerverifiedShow Answer

Describe the income statement and the relation between revenues,expenses,and net income or loss.

Correct AnswerverifiedThe income statement describes a company...View AnswerShow Answer

Owner claims on assets,also known as net assets,is called ________.

Correct AnswerverifiedShow Answer

Describe the three important guidelines for revenue recognition.

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

Regulators often have legal authority over certain activities of organizations.

Correct AnswerverifiedShow Answer

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The four broad areas of accounting are f...
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The income statement describes a company...
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The three important guidelines for reven...
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