Question 1

The accounting equation is the link between a company's assets, liabilities and equity

Accepted Answer

A) True 
 B)False

Question 2

A balance sheet covers a period of time such as a month or year

Accepted Answer

A) True 
 B)False

Question 3

An exchange between two parties of economic consideration such as goods, services, money, or rights to collect money is called:

Accepted Answer

A)  An audit.
B)  The accounting equation.
C)  Bookkeeping.
D)  A business transaction.
E)  A gift.F) A) and B)
G) A) and D)

Question 4

A partnership

Accepted Answer

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

Question 5

Profit is another name for

Accepted Answer

A)  A business transaction.
B)  Equity.
C)  Net income.
D)  Assets.
E)  The income statement.F) A) and B)
G) A) and C)

Question 6

If assets are $175,000 and equity is $47,000, then liabilities equal

Accepted Answer

A)  $175,000.
B)  $128,000.
C)  $47,000.
D)  $222,000.
E)  $204,000.F) A) and E)
G) D) and E)

Question 7

Net income appears on which of the following statement(s) ?

Accepted Answer

A)  Balance sheet.
B)  Statement of cash flows.
C)  Statement of changes in equity.
D)  Income statement.
E)  Both an income statement and statement of changes in equity.F) All of the above
G) A) and B)

Question 8

What distinguishes liabilities from equity? 199)

Accepted Answer

Liabilities are the debts of an entity. ...

Question 9

Internal users include creditors, shareholders, internal auditors and managers

Accepted Answer

A) True 
 B)False

Question 10

Describe non-business organizations

Accepted Answer

Non-business organizations ope...

Question 11

The primary objective of financial accounting is

Accepted Answer

A)  To help organizations keep track of financing activities.
B)  To prepare budgets.
C)  To help an organization to keep track of its buying and selling of resources.
D)  To help an organization define its ideas, goals, and actions.
E)  To provide external reports to help users analyze an organization's activities.F) B) and E)
G) A) and E)

Question 12

Caps Lock has liabilities of $150,000 and $100,000 in equity. What is the valueof its assets?

Accepted Answer

The answer of Caps Lock has liabilities of $150,000 and...

Question 13

Career opportunities in accounting include

Accepted Answer

A)  Auditing.
B)  Cost accounting.
C)  Management consulting.
D)  Budgeting.
E)  All of these answers are correct.F) C) and D)
G) B) and E)

Question 14

The accounting equation can be stated as

Accepted Answer

A)  Assets = liabilities + equity.
B)  Equity = assets - liabilities.
C)  Liabilities = assets - equity.
D)  Assets = non-owner equity + equity.
E)  All of these answers are correct.F) A) and B)
G) C) and D)

Question 15

Assets created by selling products or services on credit are

Accepted Answer

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

Question 16

The primary purpose of Generally Accepted Accounting Principles is to ensure the usefulness of financial information.

Accepted Answer

A) True 
 B)False

Question 17

The balance sheet equation is

Accepted Answer

A)  Debits equal credits.
B)  Another name for the accounting equation.
C)  Assets minus liabilities.
D)  The bookkeeping phase of accounting.
E)  Revenues minus expenses equals net income.F) A) and D)
G) B) and E)

Question 18

A statement of profit and loss is another name for

Accepted Answer

A)  The income statement.
B)  The accounting equation.
C)  The statement of cash flows.
D)  The statement of changes in equity.
E)  The balance sheet.F) C) and D)
G) A) and E)

Question 19

The area of accounting aimed at serving the decision-making needs of internal users is

Accepted Answer

A)  Internal control.
B)  Auditing.
C)  Managerial accounting.
D)  Financial accounting.
E)  Marketing.F) C) and D)
G) B) and D)

Question 20

Financial information that is verifiable means that

Accepted Answer

A)  Information is clear and concise.
B)  The information is useful to users with reasonable knowledge of accounting as well as business and economic activities.
C)  Users are able to compare different companies, if all the companies use similar accounting practices.
D)  Knowledgeable users agree that the financial information is faithfully represented.
E)  The financial statements have not been prepared according to GAAP.F) A) and B)
G) A) and E)

Exam 1: Accounting in Business

The area of accounting aimed at serving the decision-making needs of internal users is

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Profit is another name for

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Describe non-business organizations

Correct AnswerverifiedNon-business organizations ope...View AnswerShow Answer

What distinguishes liabilities from equity? 199)

Correct AnswerverifiedLiabilities are the debts of an entity. ...View AnswerShow Answer

Net income appears on which of the following statement(s) ?

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Assets created by selling products or services on credit are

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The primary objective of financial accounting is

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Financial information that is verifiable means that

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Internal users include creditors, shareholders, internal auditors and managers

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A partnership

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The accounting equation can be stated as

Correct AnswerverifiedShow Answer

A balance sheet covers a period of time such as a month or year

Correct AnswerverifiedShow Answer

Caps Lock has liabilities of $150,000 and $100,000 in equity. What is the valueof its assets?

Correct AnswerverifiedShow Answer

An exchange between two parties of economic consideration such as goods, services, money, or rights to collect money is called:

Correct AnswerverifiedShow Answer

The balance sheet equation is

Correct AnswerverifiedShow Answer

A statement of profit and loss is another name for

Correct AnswerverifiedShow Answer

Career opportunities in accounting include

Correct AnswerverifiedShow Answer

The accounting equation is the link between a company's assets, liabilities and equity

Correct AnswerverifiedShow Answer

The primary purpose of Generally Accepted Accounting Principles is to ensure the usefulness of financial information.

Correct AnswerverifiedShow Answer

If assets are $175,000 and equity is $47,000, then liabilities equal

Correct AnswerverifiedShow Answer

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Non-business organizations ope...
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Liabilities are the debts of an entity. ...
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