Question 1

A partnership:

Accepted Answer

A)  Is also called a sole proprietorship.
B)  Has unlimited liability for its partners.
C)  Has to have a written agreement in order to be legal.
D)  Is a legal organization separate from its owners.
E)  Has owners called shareholders.F) B) and C)
G) C) and D)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Which of the following purposes would financial statements serve for external users?

Accepted Answer

A)  To find information about projected costs and revenues of proposed products.
B)  To assess employee performance and compensation.
C)  To assist in monitoring consumer needs and price concerns.
D)  To fulfill regulatory requirements for companies whose stock is sold to the public.
E)  To determine purchasing needs.F) A) and C)
G) A) and B)

Question 4

All of the following are classified as assets except:

Accepted Answer

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

Question 5

Risk is the uncertainty about the return we will earn.

Accepted Answer

A) True 
 B)False

Question 6

Cragmont has beginning equity of $277,000,net income of $63,000,withdrawals of $25,000 and no additional investments by owners during the period.Its ending equity is:

Accepted Answer

A)  $365,000.
B)  $239,000.
C)  $189,000.
D)  $315,000.
E)  $277,000.F) B) and E)
G) C) and D)

Question 7

Determine the net income of a company for which the following information is available for the month of September.

Accepted Answer

A)  $263,800.
B)  $432,200.
C)  $171,000.
D)  $167,800.
E)  $252,000.F) D) and E)
G) B) and D)

Question 8

Resources such as cash removed from the business by the business owner for personal use are called ____________.

Accepted Answer

The answer of Resources such as cash removed from the...

Question 9

Specific accounting principles are basic assumptions,concepts,and guidelines for preparing financial statements and arise out of long-used accounting practice.

Accepted Answer

A) True 
 B)False

Question 10

Net income occurs when revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 11

An income statement reports on investing and financing activities.

Accepted Answer

A) True 
 B)False

Question 12

Marsha Bogswell is the owner of Bogswell Legal Services.Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

Accepted Answer

A)  Monetary unit assumption.
B)  Going-concern assumption.
C)  Cost principle.
D)  Business entity assumption.
E)  Matching principle.F) None of the above
G) C) and E)

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Owners of a corporation are called shareholders or stockholders.

Accepted Answer

A) True 
 B)False

Question 16

U.S.government bonds are:

Accepted Answer

A)  High-risk and high-return investments.
B)  Low-risk and low-return investments.
C)  High-risk and low-return investments.
D)  Low-risk and high-return investments.
E)  High risk and no-return investments.F) A) and C)
G) A) and D)

Question 17

Assets created by selling goods and services on credit are:

Accepted Answer

A)  Accounts payable.
B)  Accounts receivable.
C)  Liabilities.
D)  Expenses.
E)  Equity.F) B) and E)
G) A) and B)

Question 18

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.F) A) and D)
G) All of the above

Question 19

Owner's investments are increases in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 20

The monetary unit assumption means that all companies doing business in the United States must express transactions and events in U.S.dollars.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Business

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

Correct AnswerverifiedShow Answer

Owners of a corporation are called shareholders or stockholders.

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Determine the net income of a company for which the following information is available for the month of September.

Correct AnswerverifiedShow Answer

Specific accounting principles are basic assumptions,concepts,and guidelines for preparing financial statements and arise out of long-used accounting practice.

Correct AnswerverifiedShow Answer

A partnership:

Correct AnswerverifiedShow Answer

Which of the following purposes would financial statements serve for external users?

Correct AnswerverifiedShow Answer

An income statement reports on investing and financing activities.

Correct AnswerverifiedShow Answer

Owner's investments are increases in equity from a company's earnings activities.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Assets created by selling goods and services on credit are:

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Operating activities:

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Marsha Bogswell is the owner of Bogswell Legal Services.Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?

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All of the following are classified as assets except:

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The monetary unit assumption means that all companies doing business in the United States must express transactions and events in U.S.dollars.

Correct AnswerverifiedShow Answer

U.S.government bonds are:

Correct AnswerverifiedShow Answer

Cragmont has beginning equity of $277,000,net income of $63,000,withdrawals of $25,000 and no additional investments by owners during the period.Its ending equity is:

Correct AnswerverifiedShow Answer

Net income occurs when revenues exceed expenses.

Correct AnswerverifiedShow Answer

Risk is the uncertainty about the return we will earn.

Correct AnswerverifiedShow Answer

Resources such as cash removed from the business by the business owner for personal use are called ____________.

Correct AnswerverifiedShow Answer

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