Question 1

Assets that are used up during the process of earning revenue are called expenses.

Accepted Answer

A) True 
 B)False

Question 2

How does receiving a bill to be paid next month for services received affect the accounting equation?

Accepted Answer

A)   assets decrease; stockholders' equity decreases
B)   assets increase; liabilities increase
C)   liabilities increase; stockholders' equity increases
D)   liabilities increase; stockholders' equity decreasesE) C) and D)
F) None of the above

Question 3

Cash investments made by the owner in the business are reported on the statement of cash flows in the

Accepted Answer

A)   financing activities section
B)   investing activities section
C)   operating activities section
D)   supplemental statementE) None of the above
F) A) and B)

Question 4

The balance sheet represents the accounting equation.

Accepted Answer

A) True 
 B)False

Question 5

From the following list of items taken from Lamar's accounting records,identify those that would appear on the income statement.

Accepted Answer

The answer of From the following list of items taken...

Question 6

Determine the missing amount for each of the following:

Accepted Answer

The answer of Determine the missing amount for each of...

Question 7

​Prepare a statement of retained earnings for the current year ended March 31.

Accepted Answer

The answer of ​Prepare a statement of retained earnings for...

Question 8

All of the following statements regarding the ratio of liabilities to stockholders' equity are true except

Accepted Answer

A)   a ratio of 1 indicates that liabilities equal stockholders' equity
B)   sole proprietorships can use this ratio but substitute total owner's equity for total stockholders' equity
C)   the higher this ratio,the better able a business is to withstand poor business conditions and pay creditors
D)   the lower this ratio,the better able a business is to withstand poor business conditions and pay creditorsE) None of the above
F) B) and C)

Question 9

The monetary value charged to customers for the performance of services sold is called a(n)

Accepted Answer

A)   asset
B)   net income
C)   capital
D)   revenueE) None of the above
F) All of the above

Question 10

The excess of revenue over the expenses incurred in earning the revenue is called capital.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not a business transaction?

Accepted Answer

A)   Erin,the CEO,buys $15,000 in stock,placing the money in a bank account in the name of Bob's Lawn Service.
B)   Erin provided services to customers,earning fees of $600.
C)   Erin purchased hedge trimmers for Bob's Lawn Service,agreeing to pay the supplier next month.
D)   Erin pays her monthly personal credit card bill.E) B) and D)
F) None of the above

Question 12

Identify each of the following as an (1)increase to stockholders' equity,or a (2)decrease to stockholders' equity.

Accepted Answer

The answer of Identify each of the following as an...

Question 13

If the liabilities owed by a business total $300,000 and stockholders' equity is equal to $300,000,then the assets also total $300,000.

Accepted Answer

A) True 
 B)False

Question 14

The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing entities.

Accepted Answer

A) True 
 B)False

Question 15

The asset created by a business when it makes a sale on account is termed

Accepted Answer

A)   accounts payable
B)   prepaid expense
C)   interest revenue
D)   accounts receivableE) A) and B)
F) A) and C)

Question 16

Managerial accountants would be responsible for providing information regarding

Accepted Answer

A)   tax reports to government agencies
B)   profit reports to owners and management
C)   expansion of a product line report to management
D)   consumer reports to customersE) C) and D)
F) B) and D)

Question 17

A business is an organization in which basic resources or inputs,like materials and labor,are assembled and processed to provide outputs in the form of goods or services to customers.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not a business transaction?

Accepted Answer

A)   make a sales offer
B)   sell goods for cash
C)   receive cash for services to be rendered later
D)   pay for suppliesE) A) and D)
F) C) and D)

Question 19

The accounting equation may be expressed as

Accepted Answer

A)   Assets = Equities − Liabilities
B)   Assets + Liabilities = Stockholders' Equity
C)   Assets = Revenues − Liabilities
D)   Assets − Liabilities = Stockholders' EquityE) A) and B)
F) B) and C)

Question 20

For each of the following companies,identify whether they are a service,merchandising,or manufacturing business.

Accepted Answer

The answer of For each of the following companies,identify whether...

Exam 1: Introduction to Accounting and Business

Which of the following is not a business transaction?

Correct AnswerverifiedShow Answer

For each of the following companies,identify whether they are a service,merchandising,or manufacturing business.

Correct AnswerverifiedShow Answer

How does receiving a bill to be paid next month for services received affect the accounting equation?

Correct AnswerverifiedShow Answer

All of the following statements regarding the ratio of liabilities to stockholders' equity are true except

Correct AnswerverifiedShow Answer

Identify each of the following as an (1)increase to stockholders' equity,or a (2)decrease to stockholders' equity.

Correct AnswerverifiedShow Answer

The asset created by a business when it makes a sale on account is termed

Correct AnswerverifiedShow Answer

Managerial accountants would be responsible for providing information regarding

Correct AnswerverifiedShow Answer

Which of the following is not a business transaction?

Correct AnswerverifiedShow Answer

From the following list of items taken from Lamar's accounting records,identify those that would appear on the income statement.

Correct AnswerverifiedShow Answer

Cash investments made by the owner in the business are reported on the statement of cash flows in the

Correct AnswerverifiedShow Answer

​Prepare a statement of retained earnings for the current year ended March 31.

Correct AnswerverifiedShow Answer

A business is an organization in which basic resources or inputs,like materials and labor,are assembled and processed to provide outputs in the form of goods or services to customers.

Correct AnswerverifiedShow Answer

If the liabilities owed by a business total $300,000 and stockholders' equity is equal to $300,000,then the assets also total $300,000.

Correct AnswerverifiedShow Answer

The excess of revenue over the expenses incurred in earning the revenue is called capital.

Correct AnswerverifiedShow Answer

The monetary value charged to customers for the performance of services sold is called a(n)

Correct AnswerverifiedShow Answer

Determine the missing amount for each of the following:

Correct AnswerverifiedShow Answer

The balance sheet represents the accounting equation.

Correct AnswerverifiedShow Answer

The accounting equation may be expressed as

Correct AnswerverifiedShow Answer

The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing entities.

Correct AnswerverifiedShow Answer

Assets that are used up during the process of earning revenue are called expenses.

Correct AnswerverifiedShow Answer

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Prepare a statement of retained earnings for the current year ended March 31.

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