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Exam 1: Accounting in Business

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Question 111

Multiple Choice

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Assets created by selling goods and services on credit are:

A) Equity.
B) Accounts payable.
C) Expenses.
D) Liabilities.
E) Accounts receivable.

F) A) and B)
G) None of the above

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Question 112

Multiple Choice

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A company acquires equipment for $75,000 cash. This represents a(n) :

A) Financing activity.
B) Revenue activity.
C) Expense activity.
D) Operating activity.
E) Investing activity.

F) B) and C)
G) A) and D)

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Question 113

Multiple Choice

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Zapper has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is:

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income.

If Houston Company billed a client for $10,000 of consulting work completed, the accounts receivable asset increases by $10,000 and:

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

Chou Co. has a net income of $43,000, assets at the beginning of the year are $250,000 and assets at the end of the year are $300,000. Compute its return on assets.

A financial statement providing information that helps users understand a company's financial status, and which lists the types and amounts of assets, liabilities, and equity as of a specific date, is called a(n) :

If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period, what was the effect on the assets?

A corporation is:

Net Income:

Revenues are increases in equity (via net income)from a company's sales of products and services to customers.

Cash investments by owners are listed on which of the following statements?

Classify the appropriate section of the statement of cash flows with activities according.

Assets are the resources a company owns or controls that are expected to yield future benefits.

Determine the net income of a company for which the following information is available for the month of September. $\begin{array}{lr}\text { Service revenue } & \$ 300,000 \\\text { Rent expense } & 48,000 \\\text { Utilities expense } & 3,200 \\\text { Salaries expense } & 81,000\end{array}$

Accounting is an information and measurement system that does all of the following except:

Identify and describe the four basic financial statements:

The question of when revenue should be recognized on the income statement according to GAAP is addressed by the:

The four basic financial statements include the balance sheet, income statement, statement of owner's equity, and statement of cash flows.