Question 1

The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Accepted Answer

A) True 
 B)False

Question 2

Marian Mosely is the owner of Mosely Accounting Services. Which accounting principle requires Marian to keep her personal financial information separate from the financial information of Mosely Accounting Services?

Accepted Answer

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

Question 3

Owner's investments are increases in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 4

Generally the lower the risk, the lower the return that can be expected.

Accepted Answer

A) True 
 B)False

Question 5

The business entity principle means that a business will continue operating for an indefinite period of time.

Accepted Answer

A) True 
 B)False

Question 6

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Accepted Answer

A) True 
 B)False

Question 7

Risk is the _________________ about the return an investor expects to earn.

Accepted Answer

The answer of Risk is the _________________ about the return...

Question 8

Della's Donuts 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.

Accepted Answer

A)   $30,000.
B)   $83,000.
C)   $64,000.
D)   $19,000.
E)   $49,000.F) B) and C)
G) A) and E)

Question 9

Social responsibility:

Accepted Answer

A)   Is a concern for the impact of our actions on society.
B)   Is a code that helps in dealing with confidential information.
C)   Is required by the SEC.
D)   Requires that all businesses conduct social audits.
E)   Is limited to large companies.F) B) and C)
G) C) and E)

Question 10

Understanding generally accepted accounting principles is not necessary to use and interpret financial statements.

Accepted Answer

A) True 
 B)False

Question 11

Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Accepted Answer

A)   Assets increase by $75,000 and expenses increase by $75,000.
B)   Assets increase by $75,000 and expenses decrease by $75,000.
C)   Liabilities increase by $75,000 and expenses decrease by $75,000.
D)   Assets decrease by $75,000 and expenses decrease by $75,000.
E)   Assets increase by $75,000 and liabilities increase by $75,000.F) A) and E)
G) C) and D)

Question 12

Opportunities in accounting include auditing, consulting, market research, and tax planning.

Accepted Answer

A) True 
 B)False

Question 13

Internal operating activities include research and development, distribution, and human resources.

Accepted Answer

A) True 
 B)False

Question 14

A partnership:

Accepted Answer

A)   Is also called a sole proprietorship.
B)   Has unlimited liability for its partners.
C)   Has to have a written agreement in order to be legal.
D)   Is a legal organization separate from its owners.
E)   Has owners called shareholders.F) A) and D)
G) D) and E)

Question 15

If equity is $300,000 and liabilities are $192,000, then assets equal:

Accepted Answer

A)   $108,000.
B)   $192,000.
C)   $300,000.
D)   $492,000.
E)   $792,000.F) A) and E)
G) A) and D)

Question 16

An example of an operating activity is:

Accepted Answer

A)   Paying wages.
B)   Purchasing office equipment.
C)   Borrowing money from a bank.
D)   Selling stock.
E)   Paying off a loan.F) B) and D)
G) All of the above

Question 17

Describe the three types of activities reported on the statement of cash flows.

Accepted Answer

The three types of activities reported i...

Question 18

The accounting equation can be restated as: Assets - Equity = Liabilities.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

Accepted Answer

A)   Going-concern assumption.
B)   Matching principle.
C)   Cost principle.
D)   Business entity assumption.
E)   Consideration assumption.F) B) and E)
G) C) and E)

Question 20

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:

Accepted Answer

A)   $40,500 increase.
B)   $40,500 decrease.
C)   $134,500 decrease.
D)   $134,000 increase.
E)   $9,500 increasE.$62,500 - $47,000 + $25,000 = $40,500 increaseF) B) and E)
G) None of the above

Exam 1: Accounting in Business

The statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.

Correct AnswerverifiedShow Answer

Internal operating activities include research and development, distribution, and human resources.

Correct AnswerverifiedShow Answer

A partnership:

Correct AnswerverifiedShow Answer

An example of an operating activity is:

Correct AnswerverifiedShow Answer

Marian Mosely is the owner of Mosely Accounting Services. Which accounting principle requires Marian to keep her personal financial information separate from the financial information of Mosely Accounting Services?

Correct AnswerverifiedShow Answer

Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Correct AnswerverifiedShow Answer

Opportunities in accounting include auditing, consulting, market research, and tax planning.

Correct AnswerverifiedShow Answer

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:

Correct AnswerverifiedShow Answer

Della's Donuts 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.

Correct AnswerverifiedShow Answer

Risk is the _________________ about the return an investor expects to earn.

Correct AnswerverifiedShow Answer

If equity is $300,000 and liabilities are $192,000, then assets equal:

Correct AnswerverifiedShow Answer

Describe the three types of activities reported on the statement of cash flows.

Correct AnswerverifiedThe three types of activities reported i...View AnswerShow Answer

Generally the lower the risk, the lower the return that can be expected.

Correct AnswerverifiedShow Answer

Which of the following accounting principles would require that all goods and services purchased be recorded at cost?

Correct AnswerverifiedShow Answer

Social responsibility:

Correct AnswerverifiedShow Answer

The accounting equation can be restated as: Assets - Equity = Liabilities.

Correct AnswerverifiedShow Answer

Owner's investments are increases in equity from a company's earnings activities.

Correct AnswerverifiedShow Answer

Understanding generally accepted accounting principles is not necessary to use and interpret financial statements.

Correct AnswerverifiedShow Answer

The business entity principle means that a business will continue operating for an indefinite period of time.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The three types of activities reported i...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified