Question 1

Revenue is properly recognized:

Accepted Answer

A)   When the customer's order is received.
B)   Only if the transaction creates an account receivable.
C)   At the end of the accounting period.
D)   Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price.
E)   When cash from a sale is received.F) B) and C)
G) C) and D)

Question 2

Revenues are increases in equity from a company's earning activities.

Accepted Answer

A) True 
 B)False

Question 3

A corporation:

Accepted Answer

A)   Is a business legally separate from its owners.
B)   Is controlled by the FASB.
C)   Has shareholders who have unlimited liability for the acts of the corporation.
D)   Is the same as a limited liability partnership.
E)   Is not subject to double taxation.F) B) and C)
G) A) and D)

Question 4

How does the going-concern principle affect reporting asset values of a business?

Accepted Answer

The going-concern principle means that f...

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The excess of expenses over revenues for a period is:

Accepted Answer

A)   Net assets.
B)   Equity.
C)   Net loss.
D)   Net income.
E)   A liability.F) A) and C)
G) A) and D)

Question 7

The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that the building was easily worth $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Maxim to record the building on its records at $500,000?

Accepted Answer

A)   Monetary unit assumption.
B)   Going-concern assumption.
C)   Cost principle.
D)   Business entity assumption.
E)   Revenue recognition principle.F) A) and B)
G) A) and C)

Question 8

______________________ is the recording of financial transactions and events, either manually or electronically.

Accepted Answer

Recordkeep...

Question 9

What is the purpose of return on assets as an analytical tool?

Accepted Answer

Return on assets is useful in ...

Question 10

Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

Accepted Answer

A) True 
 B)False

Question 11

The records of Skymaster Airplane Rentals show the following information as of December 31. Skymaster withdrew $52,000 during the year for personal expenses. Prepare a December income statement, a December statement of owner's equity, and a December 30 balance sheet.

Accepted Answer

The answer of The records of Skymaster Airplane Rentals show...

Question 12

Investing activities are the acquiring and disposing of resources that an organization uses to acquire and sell its products or services.

Accepted Answer

A) True 
 B)False

Question 13

Arrow's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%.

Accepted Answer

A) True 
 B)False

Question 14

For each of the following transactions, identify the effects as reflected in the accounting equation. Use "+" to indicate an increase and "-" to indicate a decrease. Use "A", "L", and "E" to indicate assets, liabilities, and equity, respectively. Part A has been completed as an example.

Accepted Answer

The answer of For each of the following transactions, identify...

Question 15

Planning is defining an organization's ideas, goals, and actions.

Accepted Answer

A) True 
 B)False

Question 16

The income statement reports on operating activities at a point in time.

Accepted Answer

A) True 
 B)False

Question 17

U. S. government bonds are:

Accepted Answer

A)   High-risk and high-return investments.
B)   Low-risk and low-return investments.
C)   High-risk and low-return investments.
D)   Low-risk and high-return investments.
E)   High risk and no-return investments.F) A) and D)
G) B) and C)

Question 18

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 19

________________________________ reports changes in the owner's claim on the business's assets over a period of time.

Accepted Answer

The statem...

Question 20

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Accepted Answer

The answer of Congress passed the ______________________ to help curb...

Exam 1: Accounting in Business

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

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______________________ is the recording of financial transactions and events, either manually or electronically.

Correct AnswerverifiedRecordkeep...View AnswerShow Answer

The income statement reports on operating activities at a point in time.

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Revenues are increases in equity from a company's earning activities.

Correct AnswerverifiedShow Answer

How does the going-concern principle affect reporting asset values of a business?

Correct AnswerverifiedThe going-concern principle means that f...View AnswerShow Answer

Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.

Correct AnswerverifiedShow Answer

The records of Skymaster Airplane Rentals show the following information as of December 31. Skymaster withdrew $52,000 during the year for personal expenses. Prepare a December income statement, a December statement of owner's equity, and a December 30 balance sheet.

Correct AnswerverifiedShow Answer

A corporation:

Correct AnswerverifiedShow Answer

For each of the following transactions, identify the effects as reflected in the accounting equation. Use "+" to indicate an increase and "-" to indicate a decrease. Use "A", "L", and "E" to indicate assets, liabilities, and equity, respectively. Part A has been completed as an example.

Correct AnswerverifiedShow Answer

U. S. government bonds are:

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

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Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

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Investing activities are the acquiring and disposing of resources that an organization uses to acquire and sell its products or services.

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Planning is defining an organization's ideas, goals, and actions.

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Revenue is properly recognized:

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The excess of expenses over revenues for a period is:

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________________________________ reports changes in the owner's claim on the business's assets over a period of time.

Correct AnswerverifiedThe statem...View AnswerShow Answer

Arrow's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%.

Correct AnswerverifiedShow Answer

The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that the building was easily worth $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Maxim to record the building on its records at $500,000?

Correct AnswerverifiedShow Answer

What is the purpose of return on assets as an analytical tool?

Correct AnswerverifiedReturn on assets is useful in ...View AnswerShow Answer

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Recordkeep...
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The going-concern principle means that f...
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The statem...
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Return on assets is useful in ...
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