Question 1

sell products purchased from other businesses to make their objective of maximizing their profits

Accepted Answer

Merchandising businesses

Question 2

Which of the following users is not considered an external user of accounting information?

Accepted Answer

A Manager

Question 3

Which of the following is not accurate when it pertains to managerial accounting?

Accepted Answer

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

Question 4

Which of the following forms of business entities generates 90% of business revenues in the U.S.?

Accepted Answer

Corporations

Question 5

Which of the following concepts requires that economic data be recorded in dollars in the U.S.?

Accepted Answer

Unit of measure concept

Question 6

Which of the following statements about GAAP is not true?

Accepted Answer

GAAP allows a company\'s management to record and report data as it sees fit.

Question 7

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 concept, Emily should record

Accepted Answer

None of these choices are correct.

Question 8

Which of the following does not represent the accounting equation?

Accepted Answer

Assets + Owners\'s Equity = Liabilities

Question 9

Which of the following best represents the accounting equation?

Accepted Answer

Assets = Liabilities + Owner\'s Equity

Question 10

Assets are

Accepted Answer

resources owned by the business

Question 11

Assets and liabilities of a company are $150,000 and $30,000, respectively. Determine owner\'s equity using the accounting equation.

Accepted Answer

$120,000

Question 12

Money earned by a business for selling goods or services to its customers represents

Accepted Answer

revenues.

Question 13

The paying of an expense reduces

Accepted Answer

owner\'s equity

Question 14

Paying an amount on an account reduces

Accepted Answer

the amount owed on a liability.

Question 15

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?

Accepted Answer

$2,500 net increase in assets and $2,500 increase in liabilities

Question 16

The statement that provides the financial position of a company as of a specific date is the

Accepted Answer

Balance Sheet

Question 17

Included in the statement of owner\'s equity are

Accepted Answer

net income (loss) and withdrawals.

Question 18

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?

Accepted Answer

Statement of cash flows

Question 19

Given the following information, determine the amount of Cash on the balance sheet (assume there are only three assets). Liabilities equal $3,050; Owner\'s equity equals $25,000; Supplies equal $1,500; and Land equals $22,500.

Accepted Answer

$4,050

Question 20

Which of the following statements about GAAP is not true?

Accepted Answer

GAAP allows a company\'s management to record and report data as it sees fit.

Question 21

The area of accounting concerned with providing internal users with information is called

Accepted Answer

managerial accounting.

Question 22

Which of the following users is not considered an internal user of accounting information?

Accepted Answer

a supplier

Question 23

On August 1, Harvey Company offered to pay $13,000 for equipment that was advertised as being sold for $19,000 by Carrone Company. The equipment had a retail value of $23,000 on that day. On August 10, Carrone Company offered to sell the equipment for $14,700, and Harvey Company agreed to buy at that price. At what value will Harvey Company record the equipment on the books?

Accepted Answer

$14,700

Question 24

Assets of a company may include

Accepted Answer

cash, inventory, buildings, and equipment.

Question 25

Cool Taste Company recorded $5,000 in sales on account for the week. What effect does this transaction have on the accounting equation?

Accepted Answer

$5,000 increase in assets and $5,000 increase in owner\'s equity.

Question 26

Cool Taste Company purchased $1,500 of supplies with cash. What effect does this transaction have on the accounting equation?

Accepted Answer

no affect on the accounting equation

Question 27

The statement that reports net income or loss for a certain period in time is the

Accepted Answer

income statement

Question 28

The principles and concepts that the management of a company uses to record and report its financial information are called

Accepted Answer

GAAP

Question 29

All business transactions can be stated in terms of

Accepted Answer

changes in the elements of the accounting equation

Question 30

Which financial statement reports financial data based on the matching concept?

Accepted Answer

Income statement

Question 31

Given the following information, determine net income. The capital balance on January 1, 2016 equals $25,000; investments and withdrawals during 2016 total $53,000 and $28,350, respectively; the capital balance at December 31, 2016 equals $64,850.

Accepted Answer

$15,200

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