Question 1

Distributions of assets by a business to its owners are called:

Accepted Answer

A)   Withdrawals.
B)   Expenses.
C)   Assets.
D)   Retained earnings.
E)   Net Income.F) B) and E)
G) A) and D)

Question 2

Flash had cash inflows from operations $62,500; 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)   $40,500 increase.
B)   $40,500 decrease.
C)   $134,500 decrease.
D)   $134,000 increase.
E)   $9,500 increase.F) A) and D)
G) C) and D)

Question 3

The group that attempts to create more harmony among the accounting practices of different countries is the:

Accepted Answer

A)   AICPA.
B)   IASB.
C)   CAP.
D)   SEC.
E)   FASB.F) A) and D)
G) A) and E)

Question 4

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.

Accepted Answer

A)   $61,000 increase.
B)   $37,000 increase.
C)   $7,000 decrease.
D)   $7,000 increase.
E)   $34,000 decrease.F) B) and D)
G) A) and E)

Question 5

Match the following definitions with terms 1 through 8. Place the letter that identifies the best definition in the blank space next to the term.

Accepted Answer

The answer of Match the following definitions with terms 1...

Question 6

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 7

If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity?

Accepted Answer

A)   Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000.
B)   Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000.
C)   Assets would decrease $38,000, liabilities would decrease $38,000, and equity would not change.
D)   There would be no effect on the accounts because the accounts are affected by the same amount.
E)   None of these.F) B) and E)
G) C) and E)

Question 8

On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?

Accepted Answer

A)   $8,300
B)   $13,050
C)   $20,500
D)   $31,100
E)   $40,400F) A) and D)
G) C) and E)

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Assets removed from the business by the business owner for personal use are called ___________.

Accepted Answer

The answer of Assets removed from the business by the...

Question 11

_________ are beliefs that separate right from wrong.

Accepted Answer

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

Question 12

The accounting equation can be restated as: Assets - Equity = Liabilities.

Accepted Answer

A) True 
 B)False

Question 13

In the partnership form of business, the owners are called shareholders.

Accepted Answer

A) True 
 B)False

Question 14

Risk is the uncertainty about the return we expect to earn.

Accepted Answer

A) True 
 B)False

Question 15

Reston 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) B) and D)
G) B) and E)

Question 16

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

Accepted Answer

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

Question 17

External users of accounting information include all of the following except:

Accepted Answer

A)   Shareholders.
B)   Customers.
C)   Purchasing managers.
D)   Government regulators.
E)   Creditors.F) C) and D)
G) B) and E)

Question 18

________________ activities are the means organizations use to pay for resources such as land, building, and equipment.

Accepted Answer

The answer of ________________ activities are the means organizations use...

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 1: Accounting in Business

________________ activities are the means organizations use to pay for resources such as land, building, and equipment.

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Risk is the uncertainty about the return we expect to earn.

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

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

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_________ are beliefs that separate right from wrong.

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The group that attempts to create more harmony among the accounting practices of different countries is the:

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Assets removed from the business by the business owner for personal use are called ___________.

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Distributions of assets by a business to its owners are called:

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Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:

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In the partnership form of business, the owners are called shareholders.

Correct AnswerverifiedShow Answer

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

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

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On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?

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Match the following definitions with terms 1 through 8. Place the letter that identifies the best definition in the blank space next to the term.

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If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity?

Correct AnswerverifiedShow Answer

The accounting equation can be restated as: Assets - Equity = Liabilities.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Della's Donuts had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.

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The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

Correct AnswerverifiedShow Answer

External users of accounting information include all of the following except:

Correct AnswerverifiedShow Answer

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