Question 1

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Accepted Answer

A) True 
 B)False

Question 2

Creditors' claims on assets that reflect company obligations to provide assets,products,or services to others are called ________.

Accepted Answer

The answer of Creditors' claims on assets that reflect company...

Question 3

The going-concern assumption presumes that a business will continue operating instead of being closed or sold.

Accepted Answer

A) True 
 B)False

Question 4

Investing activities include long-term borrowing and repaying of cash from lenders.

Accepted Answer

A) True 
 B)False

Question 5

Using the accounting equation,equity is equal to ________.

Accepted Answer

assets min...

Question 6

Accounts payable appear 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)  Transaction statement.F) A) and B)
G) C) and E)

Question 7

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 8

Grandmark Printing pays the current month's rent of $2,000 to the landlord of the building where its facilities are located.How does this transaction affect the accounting equation for Grandmark?

Accepted Answer

A)  Assets would decrease $2,000 and liabilities would decrease $2,000.
B)  Assets would decrease $2,000 and equity would decrease $2,000.
C)  Assets would increase $2,000 and equity would increase $2,000.
D)  Assets would increase $2,000 and liabilities would increase $2,000.
E)  Liabilities would decrease $2,000 and equity would increase $2,000.F) A) and D)
G) B) and E)

Question 9

A limited liability company (LLC) :

Accepted Answer

A)  Has owners called members.
B)  Is subject to double taxation.
C)  Includes a general owner with unlimited liability.
D)  Is the same as a corporation.
E)  Must have more than one owner.F) C) and D)
G) A) and E)

Question 10

A corporation is:

Accepted Answer

A)  A business legally separate from its owners.
B)  Controlled by the FASB.
C)  Not responsible for its own acts and own debts.
D)  The same as a limited liability partnership.
E)  Not subject to double taxation.F) C) and E)
G) None of the above

Question 11

Zapper has beginning equity of $257,000,net income of $51,000,dividends paid of $40,000 and stockholder investments of $6,000.Its ending equity is:

Accepted Answer

A)  $223,000.
B)  $240,000.
C)  $268,000.
D)  $274,000.
E)  $208,000.F) B) and E)
G) All of the above

Question 12

The Securities and Exchange Commission (SEC)is a U.S.government agency that oversees proper use of GAAP by companies that sell stock and debt to the public.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 investor...

Question 16

An accounting system captures relevant data about transactions and then classifies,records,and reports data.

Accepted Answer

A) True 
 B)False

Question 17

Identify and describe the four basic financial statements:

Accepted Answer

The four basic financial statements are ...

Question 18

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:

Accepted Answer

A)  Accounting equation.
B)  Measurement (Cost) principle.
C)  Going-concern assumption.
D)  Realization principle.
E)  Business entity assumption.F) A) and B)
G) B) and C)

Question 19

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

Accepted Answer

A) True 
 B)False

Question 20

A balance sheet lists:

Accepted Answer

A)  The types and amounts of the revenues and expenses of a business.
B)  Only the information about what happened to equity during a time period.
C)  The types and amounts of assets,liabilities,and equity of a business as of a specific date.
D)  The inflows and outflows of cash during the period.
E)  The assets and liabilities of a company but not the stockholders' equity.F) A) and B)
G) A) and C)

Exam 1: Accounting in Business

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Correct AnswerverifiedShow Answer

Investing activities include long-term borrowing and repaying of cash from lenders.

Correct AnswerverifiedShow Answer

A corporation is:

Correct AnswerverifiedShow Answer

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:

Correct AnswerverifiedShow Answer

A balance sheet lists:

Correct AnswerverifiedShow Answer

An accounting system captures relevant data about transactions and then classifies,records,and reports data.

Correct AnswerverifiedShow Answer

Accounts payable appear on which of the following statements?

Correct AnswerverifiedShow Answer

Creditors' claims on assets that reflect company obligations to provide assets,products,or services to others are called ________.

Correct AnswerverifiedShow Answer

The going-concern assumption presumes that a business will continue operating instead of being closed or sold.

Correct AnswerverifiedShow Answer

Zapper has beginning equity of $257,000,net income of $51,000,dividends paid of $40,000 and stockholder investments of $6,000.Its ending equity is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

Correct AnswerverifiedShow Answer

Grandmark Printing pays the current month's rent of $2,000 to the landlord of the building where its facilities are located.How does this transaction affect the accounting equation for Grandmark?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A limited liability company (LLC) :

Correct AnswerverifiedShow Answer

Identify and describe the four basic financial statements:

Correct AnswerverifiedThe four basic financial statements are ...View AnswerShow Answer

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

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 investor...View AnswerShow Answer

Using the accounting equation,equity is equal to ________.

Correct Answerverifiedassets min...View AnswerShow Answer

The Securities and Exchange Commission (SEC)is a U.S.government agency that oversees proper use of GAAP by companies that sell stock and debt to the public.

Correct AnswerverifiedShow Answer

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The four basic financial statements are ...
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a.The risk involved is that the investor...
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assets min...
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