Question 1

Which of the following is true regarding the corporate form of business organization?

Accepted Answer

A)   Corporations are the most prevalent form of business organization.
B)   Corporate businesses are generally smaller in size than partnerships and proprietor-ships.
C)   The revenues of corporations are greater than the combined revenues of partnerships and proprietorships.
D)   Corporations are separate legal entities organized exclusively under federal law.

Question 2

Which of the following would not be considered an external user of accounting data for the GHI Company?

Accepted Answer

A)   Internal Revenue Service Agent.
B)   Management.
C)   Creditors.
D)   Customers.

Question 3

Internal users of accounting information include all of the following except

Accepted Answer

A)   company officers.
B)   investors.
C)   marketing managers.
D)   production supervisors.

Question 4

U.S. standards are developed by the

Accepted Answer

A)   IFRS.
B)   GAAP.
C)   IASB.
D)   FASB.IFRS.

Question 5

The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles. It is true that

Accepted Answer

A)   they are both governmental agencies.
B)   the SEC is a private organization of accountants.
C)   the SEC often mandates guidelines when no accounting principles exist.
D)   the SEC and FASB rarely cooperate in developing accounting standards.

Question 6

GAAP stands for

Accepted Answer

A)   Generally Accepted Auditing Procedures.
B)   Generally Accepted Accounting Principles.
C)   Generally Accepted Auditing Principles.
D)   Generally Accepted Accounting Procedures.

Question 7

Windsor Service had the following financial information at the end of 2018.  Instructions:
Prepare a 2018 income statement, 2018 retained earnings statement, and a 12/31/18 balance sheet for Windsor Service.

Accepted Answer

The answer of Windsor Service had the following financial information...

Question 8

Stahl Consulting started the year with total assets of $60,000 and total liabilities of $15,000. During the year, the business recorded $48,000 in catering revenues and $30,000 in expenses. Stahl issued stock of $9,000 and paid dividends of $15,000 during the year. The net income reported by Stahl Consulting for the year was:

Accepted Answer

A)   $3,000.
B)   $12,000.
C)   $18,000.
D)   $27,000.

Question 9

A balance sheet reports the assets and liabilities of a company for a specific period of time.

Accepted Answer

A) True 
 B)False

Question 10

The primary accounting standard-setting body in the United States is the

Accepted Answer

A)   Financial Accounting Standards Board.
B)   International Accounting Standards Board.
C)   Internal Revenue Service.
D)   Securities and Exchange Commission.

Question 11

The starting point of the accounting process is

Accepted Answer

A)   communicating information to users.
B)   identifying economic events.
C)   recording economic events.
D)   None of these answers are correct.

Question 12

The assumption that the unit of measure remains sufficiently constant over time is part of the

Accepted Answer

A)   economic entity assumption.
B)   cost principle.
C)   historical cost principle.
D)   monetary unit assumption.

Question 13

The income statement is sometimes referred to as the statement of operations.

Accepted Answer

A) True 
 B)False

Question 14

U.S. standards are referred to as

Accepted Answer

A)   IFRS.
B)   GAAP.
C)   IASB.
D)   FASB.IFRS

Question 15

Communication of economic events is the part of the accounting process that involves

Accepted Answer

A)   identifying economic events.
B)   quantifying transactions into dollars and cents.
C)   preparing accounting reports.
D)   recording and classifying information.

Question 16

If total liabilities decreased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

Accepted Answer

A)   $50,000 decrease
B)   $10,000 decrease
C)   $10,000 increase
D)   $50,000 increase

Question 17

Owners of business firms are the only people who need accounting information.

Accepted Answer

A) True 
 B)False

Question 18

When assets are distributed to the owners of a corporation, these distributions are termed

Accepted Answer

A)   depletions.
B)   consumptions.
C)   dividends.
D)   a credit line.

Question 19

Match between columns
                        Premises: Amounts owed to suppliers for goods and services purchased
Amounts owed to bank
Amounts due from customers
Party to whom money is owed

Accepted Answer

The Answer of Accounts receivable and Note payable and Accounts is...

Question 20

A small neighborhood barber shop that is operated by its owner would likely be organized as a

Accepted Answer

A)   joint venture.
B)   partnership.
C)   corporation.
D)   proprietorship.

Exam 1: Accounting in Action

The income statement is sometimes referred to as the statement of operations.

Correct Answer
verified

Windsor Service had the following financial information at the end of 2018. Instructions: Prepare a 2018 income statement, 2018 retained earnings statement, and a 12/31/18 balance sheet for Windsor Service.

Correct Answer
verified

A balance sheet reports the assets and liabilities of a company for a specific period of time.

Correct Answer
verified

The starting point of the accounting process is

Correct Answer
verified

The primary accounting standard-setting body in the United States is the

Correct Answer
verified

U.S. standards are developed by the

Correct Answer
verified

Correct Answer
verified

Which of the following is true regarding the corporate form of business organization?

Correct Answer
verified

Internal users of accounting information include all of the following except

Correct Answer
verified

The assumption that the unit of measure remains sufficiently constant over time is part of the

Correct Answer
verified

Match the following terms and definitions.

U.S. standards are referred to as

Correct Answer
verified

Which of the following would not be considered an external user of accounting data for the GHI Company?

Correct Answer
verified

If total liabilities decreased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

Correct Answer
verified

The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles. It is true that

Correct Answer
verified

When assets are distributed to the owners of a corporation, these distributions are termed

Correct Answer
verified

Communication of economic events is the part of the accounting process that involves

Correct Answer
verified

Owners of business firms are the only people who need accounting information.

Correct Answer
verified

GAAP stands for

Correct Answer
verified

A small neighborhood barber shop that is operated by its owner would likely be organized as a

Correct Answer
verified

Exam 1: Accounting in Action

The income statement is sometimes referred to as the statement of operations.

Correct AnswerverifiedShow Answer

Windsor Service had the following financial information at the end of 2018. Instructions: Prepare a 2018 income statement, 2018 retained earnings statement, and a 12/31/18 balance sheet for Windsor Service.

Correct AnswerverifiedShow Answer

A balance sheet reports the assets and liabilities of a company for a specific period of time.

Correct AnswerverifiedShow Answer

The starting point of the accounting process is

Correct AnswerverifiedShow Answer

The primary accounting standard-setting body in the United States is the

Correct AnswerverifiedShow Answer

U.S. standards are developed by the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true regarding the corporate form of business organization?

Correct AnswerverifiedShow Answer

Internal users of accounting information include all of the following except

Correct AnswerverifiedShow Answer

The assumption that the unit of measure remains sufficiently constant over time is part of the

Correct AnswerverifiedShow Answer

Match the following terms and definitions.

U.S. standards are referred to as

Correct AnswerverifiedShow Answer

Which of the following would not be considered an external user of accounting data for the GHI Company?

Correct AnswerverifiedShow Answer

If total liabilities decreased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

Correct AnswerverifiedShow Answer

The SEC and FASB are two organizations that are primarily responsible for establishing generally accepted accounting principles. It is true that

Correct AnswerverifiedShow Answer

When assets are distributed to the owners of a corporation, these distributions are termed

Correct AnswerverifiedShow Answer

Communication of economic events is the part of the accounting process that involves

Correct AnswerverifiedShow Answer

Owners of business firms are the only people who need accounting information.

Correct AnswerverifiedShow Answer

GAAP stands for

Correct AnswerverifiedShow Answer

A small neighborhood barber shop that is operated by its owner would likely be organized as a

Correct AnswerverifiedShow Answer

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