Question 1

Ending retained earnings on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

Accepted Answer

A) True 
 B)False

Question 2

An example of an operating activity is:

Accepted Answer

A)  Paying wages.
B)  Purchasing office equipment.
C)  Borrowing money from a bank.
D)  Selling stock.
E)  Paying off a loan.F) B) and E)
G) B) and D)

Question 3

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

Accepted Answer

A)  $190,000.
B)  $210,000.
C)  $230,000.
D)  $400,000.
E)  $610,000.F) D) and E)
G) All of the above

Question 4

____________ are the increases in equity from a company's sales of products and services to customers.

Accepted Answer

The answer of ____________ are the increases in equity from...

Question 5

______________ users of accounting information are not directly involved in running the organization.

Accepted Answer

The answer of ______________ users of accounting information are not...

Question 6

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 7

Prevor Corporation reports the following account balances at the end of its first year of operation:  Prevor's total equity equals:

Accepted Answer

A)  $20,000.
B)  $50,000.
C)  $42,500.
D)  $34,000.
E)  $22,500.F) A) and D)
G) C) and D)

Question 8

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 when the first rent payment is collected?

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) A) and E)
G) A) and D)

Question 9

If a company receives $12,000 from the stockholders 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) A) and D)
G) A) and E)

Question 10

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

Accepted Answer

The four broad areas of accounting are f...

Question 11

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 12

The financial statement that identifies a company's cash receipts and cash payments over a period of time is the:

Accepted Answer

A)  Statement of financial position.
B)  Statement of cash flows.
C)  Balance sheet.
D)  Income statement.
E)  Statement of changes in stockholders' equity.F) A) and E)
G) C) and D)

Question 13

A common characteristic of __________ is their ability to yield expected future benefits to a business.

Accepted Answer

The answer of A common characteristic of __________ is their...

Question 14

Resources a company owns or controls that are expected to yield future benefits are:

Accepted Answer

A)  Assets.
B)  Revenues.
C)  Liabilities.
D)  Stockholders' Equity.
E)  Expenses.F) A) and B)
G) A) and C)

Question 15

Cornelia's Closet has the following account balances for the dates given:  Also, its net income, for October 1 through October 31 was $20,000 and there were no investments or withdrawals by the owner. Determine the equity at both October 1 and October 31.

Accepted Answer

October 1^st Equity = $...

Question 16

Cash investments by stockholders are listed on which of the following statements?

Accepted Answer

A)  Balance sheet.
B)  Income statement.
C)  Statement of retained earnings.
D)  Statement of cash flows.
E)  All of the above.F) A) and B)
G) B) and C)

Question 17

External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 18

Using the accounting equation, equity is equal to ________________________.

Accepted Answer

assets min...

Question 19

The FASB and IASB are attempting to converge and enhance the conceptual framework that guides standard setting, however the differences between U.S. GAAP and IFRS greatly outweigh the similarities.

Accepted Answer

A) True 
 B)False

Question 20

Identify the risk and the return in each of the following examples.
a. Investing $500 in a certificate of deposit at 4.5% interest.
b. Placing a $100 bet on an NBA game.
c. Investing $10,000 in Microsoft stock.
d. Borrowing $20,000 in student loans.

Accepted Answer

a. The risk involved is that the investo...

Exam 1: Introducing Financial Accounting

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

Correct AnswerverifiedShow Answer

External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The FASB and IASB are attempting to converge and enhance the conceptual framework that guides standard setting, however the differences between U.S. GAAP and IFRS greatly outweigh the similarities.

Correct AnswerverifiedShow Answer

An example of an operating activity is:

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

Ending retained earnings on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Resources a company owns or controls that are expected to yield future benefits are:

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 when the first rent payment is collected?

Correct AnswerverifiedShow Answer

Cornelia's Closet has the following account balances for the dates given: Also, its net income, for October 1 through October 31 was $20,000 and there were no investments or withdrawals by the owner. Determine the equity at both October 1 and October 31.

Correct AnswerverifiedOctober 1st Equity = $...View AnswerShow Answer

Cash investments by stockholders are listed on which of the following statements?

Correct AnswerverifiedShow Answer

The financial statement that identifies a company's cash receipts and cash payments over a period of time is the:

Correct AnswerverifiedShow Answer

A common characteristic of __________ is their ability to yield expected future benefits to a business.

Correct AnswerverifiedShow Answer

______________ users of accounting information are not directly involved in running the organization.

Correct AnswerverifiedShow Answer

Using the accounting equation, equity is equal to ________________________.

Correct Answerverifiedassets min...View AnswerShow Answer

____________ are the increases in equity from a company's sales of products and services to customers.

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

Identify the risk and the return in each of the following examples. a. Investing $500 in a certificate of deposit at 4.5% interest. b. Placing a $100 bet on an NBA game. c. Investing $10,000 in Microsoft stock. d. Borrowing $20,000 in student loans.

Correct Answerverifieda. The risk involved is that the investo...View AnswerShow Answer

Prevor Corporation reports the following account balances at the end of its first year of operation: Prevor's total equity equals:

Correct AnswerverifiedShow Answer

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The four broad areas of accounting are f...
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October 1^st Equity = $...
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assets min...
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a. The risk involved is that the investo...
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Correct Answer
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