Question 1

Which of the following is not a business entity?

Accepted Answer

A)  entrepreneurship
B)  proprietorship
C)  partnership
D)  corporationE) B) and C)
F) B) and D)

Question 2

Senior executives cannot be criminally prosecuted for the wrongdoings they commit on behalf of the companies where they work.

Accepted Answer

A) True 
 B)False

Question 3

Match the following business types with each business listed below. Each may be used more than once.
-A health club and spa

Accepted Answer

A)  Service business
B)  Manufacturing business
C)  Merchandising businessD) None of the above
E) A) and B)

Question 4

Krammer Company has liabilities equal to one-fourth of the total assets.Krammer's owner's equity is $45,000.Using the accounting equation,what is the amount of liabilities for Krammer?

Accepted Answer

The answer of Krammer Company has liabilities equal to one-fourth...

Question 5

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once.
-Organized as a separate legal taxable entity

Accepted Answer

A)  Proprietorship
B)  Partnership
C)  Corporation
D)  Limited liability company (LL
C)  E) A) and B)
F) A) and C)

Question 6

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Purchased equipment for cash

Accepted Answer

A)  Increase assets, increase liabilities
B)  Increase liabilities, decrease owner's equity
C)  Increase assets, increase owner's equity
D)  No effect
E)  Decrease assets, decrease liabilitiesF) Decrease assets, decrease owner's equityG) A) and B)
H) B) and D)

Question 7

The year-end balance of the owner's capital account appears in

Accepted Answer

A)  both the statement of owner's equity and the income statement
B)  only the statement of owner's equity
C)  both the statement of owner's equity and the balance sheet
D)  both the statement of owner's equity and the statement of cash flowsE) All of the above
F) C) and D)

Question 8

Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once.
-The first statement prepared

Accepted Answer

A)  Income statement
B)  Balance sheet
C)  Statement of owner's equity
D)  Statement of cash flowsE) C) and D)
F) B) and C)

Question 9

Equipment with an estimated market value of $30,000 is offered for sale at $45,000.The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days.The amount used in the buyer's accounting records to record this acquisition is

Accepted Answer

A)  $30,000
B)  $35,000
C)  $15,000
D)  $45,000E) B) and C)
F) A) and D)

Question 10

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Paid part of an amount owed to a creditor

Accepted Answer

A)  Increase assets, increase liabilities
B)  Increase liabilities, decrease owner's equity
C)  Increase assets, increase owner's equity
D)  No effect
E)  Decrease assets, decrease liabilitiesF) Decrease assets, decrease owner's equityG) A) and F)
H) B) and C)

Question 11

The initials GAAP stand for

Accepted Answer

A)  general accounting procedures
B)  generally accepted plans
C)  generally accepted accounting principles
D)  generally accepted accounting practicesE) B) and C)
F) None of the above

Question 12

If a building is appraised for $85,000,it is offered for sale at $90,000,and the buyer pays $80,000 cash for it,the buyer would record the building at $85,000.

Accepted Answer

A) True 
 B)False

Question 13

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Paid cash for the purchase of a one-year insurance policy

Accepted Answer

A)  Increase assets, increase liabilities
B)  Increase liabilities, decrease owner's equity
C)  Increase assets, increase owner's equity
D)  No effect
E)  Decrease assets, decrease liabilitiesF) Decrease assets, decrease owner's equityG) A) and F)
H) B) and D)

Question 14

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 15

Which of the following best describes accounting?

Accepted Answer

A)  records economic data but does not communicate the data to users according to any specific rules
B)  is an information system that provides reports to users regarding economic activities and condition of a business
C)  is of no use by individuals outside of the business
D)  is used only for filling out tax returns and for financial statements for various type of governmental reporting requirementsE) B) and C)
F) A) and D)

Question 16

Match the following business types with each business listed below. Each may be used more than once.
-A book publisher

Accepted Answer

A)  Service business
B)  Manufacturing business
C)  Merchandising businessD) A) and B)
E) A) and C)

Question 17

Which of the following is not true of accounting principles?

Accepted Answer

A)  Financial accountants follow generally accepted accounting principles (GAAP) .
B)  Following GAAP allows accounting information users to compare one company to another.
C)  A new accounting principle can be adopted with stockholders' approval.
D)  The Financial Accounting Standards Board (FAS
B)   has primary responsibility for developing accounting principles.E) B) and D)
F) B) and C)

Question 18

The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.

Accepted Answer

A) True 
 B)False

Question 19

A merchandising business buys products from other businesses to sell to customers.

Accepted Answer

A) True 
 B)False

Question 20

Within the United States,the dominant body in the primary development of accounting principles is the

Accepted Answer

A)  American Institute of Certified Public Accountants (AICP
A)  
B)  American Accounting Association (AA
A)  
C)  Financial Accounting Standards Board (FAS
B)  
D)  Institute of Management Accountants (IM
A)  E) A) and B)
F) B) and D)

Exam 1: Introduction to Accounting and Business

If a building is appraised for $85,000,it is offered for sale at $90,000,and the buyer pays $80,000 cash for it,the buyer would record the building at $85,000.

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Match the following business types with each business listed below. Each may be used more than once. -A health club and spa

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Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Paid part of an amount owed to a creditor

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Which of the following best describes accounting?

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Equipment with an estimated market value of $30,000 is offered for sale at $45,000.The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days.The amount used in the buyer's accounting records to record this acquisition is

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Within the United States,the dominant body in the primary development of accounting principles is the

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Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Paid cash for the purchase of a one-year insurance policy

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Krammer Company has liabilities equal to one-fourth of the total assets.Krammer's owner's equity is $45,000.Using the accounting equation,what is the amount of liabilities for Krammer?

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The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.

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A merchandising business buys products from other businesses to sell to customers.

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The initials GAAP stand for

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Match the following business types with each business listed below. Each may be used more than once. -A book publisher

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Which of the following is not a business entity?

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Senior executives cannot be criminally prosecuted for the wrongdoings they commit on behalf of the companies where they work.

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Which of the following is not true of accounting principles?

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Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once. -The first statement prepared

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Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Organized as a separate legal taxable entity

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

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The year-end balance of the owner's capital account appears in

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Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Purchased equipment for cash

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