ACCT ASP Ch. 1 – Flashcards

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question
Which of the following users is not considered an internal user of accounting information? A. An employee B. A small business owner C. A manager D. A supplier
answer
D
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Which of the following users is not considered an external user of accounting information? A. The government B. A creditor C. An investor D. A manager
answer
D
question
Which of the following is not accurate when it pertains to managerial accounting? A. Uses both financial accounting information and estimates in helping managers make daily decisions B. Provides economic data reports on the operations and condition of the business that are useful for banks and other creditors in deciding whether to lend money to the business C. Uses past information to estimate the planning of future operations D. Gathers and reports information that is relevant to the decision-making needs of management
answer
B
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Which of the following forms of business entities generates 90% of business revenues in the United States? A. Corporations B. Partnerships C. Manufacturing companies D. Proprietorships
answer
A
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The principles and assumptions that the management of a company uses to record and report its financial information are called A. AICPA. B. GAAP. C. SEC. D. FASB.
answer
B
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The business entity assumption is important because A. it requires that the company record all of its economic transactions in accordance with GAAP. B. it requires that all transactions be recorded in the period in which they occur. C. it limits economic data in the accounting system to data directly related to the activities of the business. D. it limits the amount that a company can record for its transactions in the accounting records.
answer
C
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Accounting principles within the United States are primarily developed by the A. FASB. B. SEC. C. IASB. D. GAAP.
answer
A
question
Emily owns three businesses: a dry cleaner, a market, and a candy store. The dry cleaner has revenue of $5,000; the market has revenue of $10,000; and the candy store has revenue of $7,000. Under the business entity assumption, Emily should record A. $22,000 of revenue in the records of the market. B. $22,000 of revenue in the records of the dry cleaner. C. $22,000 of revenue in her personal records. D. None of these choices are correct.
answer
D
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Equipment with a sales price of $100,000 is purchased at a discount of 10% by Aaron Company. At what value should the equipment be recorded in Aaron Company's records? A. $10,000 B. $100,000 C. $90,000 D. None of these choices are correct.
answer
C
question
Which of the following does not represent the accounting equation? A. Assets − Stockholders' Equity = Liabilities B. Assets − Liabilities = Stockholders' Equity C. Assets + Stockholders' Equity = Liabilities D. Assets = Liabilities + Stockholders' Equity
answer
C
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Liabilities are A. the rights of customers. B. the rights of creditors. C. the rights of owners. D. None of these choices are correct.
answer
B
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Which of the following best represents the accounting equation? A. Assets + Liabilities = Stockholders' Equity B. Assets = Liabilities - Stockholders' Equity C. Assets + Stockholders' Equity = Liabilities D. Assets = Liabilities + Stockholders' Equity
answer
D
question
Assets and liabilities of a company are $150,000 and $30,000, respectively. Determine stockholders' equity using the accounting equation. A. $150,000 B. $180,000 C. $30,000 D. $120,000
answer
D
question
Assets and stockholders' equity of a company are $150,000 and $75,000, respectively. Determine liabilities using the accounting equation. A. $75,000 B. $150,000 C. $25,000 D. $225,000
answer
A
question
Liabilities and stockholders' equity of a company are $50,000 and $150,000, respectively. Determine assets using the accounting equation. A. $100,000 B. $150,000 C. $50,000 D. $200,000
answer
D
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Each of the following transactions affects stockholders' equity except A. a sale on account. B. a payment of dividends. C. the purchase of land with cash. D. an investment of cash in exchange for common stock.
answer
C
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Clayton Company purchased a new coffee maker in the amount of $3,500. Clayton paid $1,000 down and will pay the remainder in 60 days. What effect does this transaction have on the accounting equation? A. $3,500 net increase in assets and $3,500 increase in liabilities B. $2,500 net increase in assets and $2,500 increase in liabilities C. $1,000 net decrease in assets and $1,000 decrease in liabilities D. $3,500 net increase in assets and $2,500 increase in liabilities
answer
B
question
Ramos Inc. has total assets of $1,000 and total liabilities of $450 on December 31, 2018. Assume that assets increased by $130 and liabilities decreased by $25 during 2019. What would stockholders' equity be as of December 31, 2019? A. $705 B. $550 C. $655 D. $1,295
answer
A
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The paying of an expense reduces A. the amount owed on a liability. B. Accounts Payable. C. Accounts Receivable. D. stockholders' equity.
answer
D
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Which of the following statements is not true? A. Stockholders' equity is increased by stockholders' investments and is decreased by dividends. B. The effect of every transaction is an increase or a decrease in one or more of the accounting equation elements. C. The two sides of the accounting equation are always equal. D. All of these statements are true.
answer
D
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Paying an amount on account reduces A. stockholders' equity. B. an expense. C. the amount owed on a liability. D. net income.
answer
C
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The statement that provides the financial position of a company as of a specific date is the A. statement of cash flows. B. retained earnings statement. C. income statement. D. balance sheet.
answer
D
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Which financial statement reports financial data based on the revenue and expense recognition principles? A. Retained earnings statement B. Income statement C. Statement of cash flows D. Balance sheet
answer
B
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Which of the following statements provides a summary of cash receipts and cash payments for a specific period of time, such as a month or a year? A. Balance sheet B. Retained earnings statement C. Statement of cash flows D. Income statement
answer
C
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Given the following information, determine net income. The retained earnings balance on January 1, 2018, equals $58,000; dividends during 2018 total $18,350; and the retained earnings balance at December 31, 2018, equals $64,850. A. $11,500 B. $25,200 C. $39,650 D. None of these choices are correct.
answer
B
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Given the following information, determine Fees Earned. Wages expense equals $4,400; supplies expense equals $2,900; and miscellaneous expense equals $1,250. Net income equals $5,100. A. $13,650 B. $8,550 C. $3,450 D. $5,100
answer
A
question
Given the following information, determine the amount of Cash on the balance sheet (assume there are only three assets). Liabilities equal $3,050; Stockholders' equity equals $25,000; Supplies equal $1,500; and Land equals $22,500. A. $4,050 B. $7,050 C. $2,050 D. None of these choices are correct.
answer
A
question
The total of the shareholders' rights or claims to the assets of a corporation is called A. total stockholders' equity. B. total liabilities. C. total revenues. D. total assets.
answer
A
question
All of the following are incorrect as to the rights of creditors regarding a business's assets except A. the rights of creditors and the rights of the owners are equal. B. the rights of creditors come before the rights of stockholders. C. the rights of the stockholders precede the rights of the creditors. D. the rights of creditors come after the rights of owners.
answer
B
question
The ratio of liabilities to stockholders' equity is a tool used to assess a company's ability to A. improve its operating performance. B. beat its competitors. C. pay its creditors. D. All of these choices are correct.
answer
C
question
Four companies and their ratio of liabilities to stockholders' equity are as follows: Fred Company 0.88 Yabba Company 0.44 Dabba Company 1.22 Doo Company 0.66 To which company would a supplier be most eager to extend credit? A. Dabba Company B. Yabba Company C. Doo Company D. Fred Company
answer
B
question
The denominator in the calculation of the ratio of liabilities to stockholders' equity is A. Total Assets. B. Total Stockholders' Equity. C. Total Liabilities minus Total Stockholders' Equity. D. Total Liabilities.
answer
B
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