Question 1

Net income is sometimes called earnings or profit.

Accepted Answer

A) True 
 B)False

Question 2

The fraud triangle asserts that there are three factors that push a person to commit fraud: opportunity,pressure,and rationalization.

Accepted Answer

A) True 
 B)False

Question 3

Technology:

Accepted Answer

A)  Has replaced accounting.
B)  Has not improved the clerical accuracy of accounting.
C)  Reduces the time,effort and cost of recordkeeping.
D)  In accounting has replaced the need for decision makers.
E)  In accounting is only available to large corporations.F) A) and B)
G) All of the above

Question 4

The ________ principle requires that financial information is supported by independent,unbiased evidence.

Accepted Answer

The answer of The ________ principle requires that financial information...

Question 5

At the beginning of the year,a company had $120,000 worth of liabilities.During the year,assets increased by $160,000 and at year-end they equaled $360,000.Liabilities decreased $20,000 during the year.Calculate the beginning and ending values of equity.

Accepted Answer

Beginning equity = $...

Question 6

Zippy had cash inflows from operations $60,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was:

Accepted Answer

A)  $38,500 increase.
B)  $38,500 decrease.
C)  $132,500 decrease.
D)  $132,000 increase.
E)  $11,500 decrease.F) B) and D)
G) B) and E)

Question 7

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

Accepted Answer

A) True 
 B)False

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

Opportunities in accounting include auditing,consulting,market research,and tax planning.

Accepted Answer

A) True 
 B)False

Question 10

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Accepted Answer

A)  APB.
B)  FASB.
C)  AAA.
D)  AICPA.
E)  SEC.F) A) and C)
G) All of the above

Question 11

If a company has excess space in its building that it rents to another company for $700,what is the effect on the accounting equation during the first month?

Accepted Answer

A)  Assets would decrease $700 and liabilities would decrease $700.
B)  Assets would decrease $700 and equity would increase $700.
C)  Assets would increase $700 and equity would decrease $700.
D)  Assets would increase $700 and equity would increase $700.
E)  Liabilities would decrease $700 and equity would increase $700.F) B) and E)
G) All of the above

Question 12

The business entity assumption means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Accepted Answer

A) True 
 B)False

Question 13

Cash (or other assets) stockholders receive from the company are called a(n) :

Accepted Answer

A)  Liability.
B)  Dividend.
C)  Expense.
D)  Common Stock.
E)  Investment.F) A) and D)
G) A) and E)

Question 14

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 15

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Accepted Answer

A)  Increased $22,000.
B)  Decreased $22,000.
C)  Increased $89,000.
D)  Decreased $156,000.
E)  Increased $156,000.F) B) and D)
G) A) and E)

Question 16

The revenue recognition principle requires that revenue be recognized when goods or services are provided to customers,and at the amount expected to be received from the customer.

Accepted Answer

A) True 
 B)False

Question 17

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

Accepted Answer

A)  Balance sheet.
B)  Statement of retained earnings.
C)  Statement of cash flows.
D)  Income statement.
E)  Statement of financial position.F) None of the above
G) B) and C)

Question 18

The statement of cash flows identifies cash flows separated into operating,investing,and financing activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 19

The income statement reports all of the following except:

Accepted Answer

A)  Revenues earned by a business.
B)  Expenses incurred by a business.
C)  Assets owned by a business.
D)  Net income or loss earned by a business.
E)  The time period over which the earnings occurred.F) All of the above
G) A) and B)

Question 20

The four basic financial statements include the balance sheet,income statement,statement of retained earnings,and statement of cash flows.

Accepted Answer

A) True 
 B)False

Exam 1: Introducing Financial Statements

The business entity assumption means that a business is accounted for separately from other business entities,including its owner or owners.

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

Cash (or other assets) stockholders receive from the company are called a(n) :

Correct AnswerverifiedShow Answer

Zippy had cash inflows from operations $60,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was:

Correct AnswerverifiedShow Answer

The fraud triangle asserts that there are three factors that push a person to commit fraud: opportunity,pressure,and rationalization.

Correct AnswerverifiedShow Answer

The ________ principle requires that financial information is supported by independent,unbiased evidence.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Technology:

Correct AnswerverifiedShow Answer

Opportunities in accounting include auditing,consulting,market research,and tax planning.

Correct AnswerverifiedShow Answer

Net income is sometimes called earnings or profit.

Correct AnswerverifiedShow Answer

The four basic financial statements include the balance sheet,income statement,statement of retained earnings,and statement of cash flows.

Correct AnswerverifiedShow Answer

At the beginning of the year,a company had $120,000 worth of liabilities.During the year,assets increased by $160,000 and at year-end they equaled $360,000.Liabilities decreased $20,000 during the year.Calculate the beginning and ending values of equity.

Correct AnswerverifiedBeginning equity = $...View AnswerShow Answer

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Correct AnswerverifiedShow Answer

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the:

Correct AnswerverifiedShow Answer

The business entity assumption means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Correct AnswerverifiedShow Answer

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

Correct AnswerverifiedShow Answer

The revenue recognition principle requires that revenue be recognized when goods or services are provided to customers,and at the amount expected to be received from the customer.

Correct AnswerverifiedShow Answer

If a company has excess space in its building that it rents to another company for $700,what is the effect on the accounting equation during the first month?

Correct AnswerverifiedShow Answer

The statement of cash flows identifies cash flows separated into operating,investing,and financing activities over a period of time.

Correct AnswerverifiedShow Answer

The income statement reports all of the following except:

Correct AnswerverifiedShow Answer

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The income statement describes a company...
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Beginning equity = $...
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