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Exam 1: Introduction to Accounting and Business

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Question 61

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Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Offers tax and legal liability advantages for owners

A) Proprietorship
B) Partnership
C) Corporation
D) Limited liability company (LLC)

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Question 62

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The owner's rights to the assets rank ahead of the creditors' rights to the assets.

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Question 63

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Which of the following concepts relates to separating the reporting of business and personal economic transactions?

An income statement is a summary of the revenues and expenses of a business as of a specific date.

All of the following statements regarding the ratio of liabilities to owner's equity are true except

The following are examples of external users of accounting information except

The asset created by a business when it makes a sale on account is termed

A business is an organization in which basic resources or inputs, such as materials and labor, are assembled and processed to provide outputs in the form of goods or services to customers.

Which of the following is not a business transaction?

Which of the following is not an asset?

Martin Blair is the owner and operator of Martin Consultants. At December 31 of the current year, Martin Consultants has assets of $430,000 and liabilities of $205,000. Using the accounting equation and considering each case independently, determine the following:? (a) Martin Blair, capital, as of December 31. (b) Martin Blair, capital, as of December 31 of the next year, assuming that assets increased by $12,000and liabilities increased by $15,000. (c) Martin Blair, capital, as of December 31 of the next year, assuming that assets decreased by $8,000and liabilities increased by $14,000.

The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The capital of the owner was $180,000 at April 1, the beginning of the current year. Mr. Thompson invested an additional $25,000 in the business during the year. ? $\begin{array} { l r l r } \text { Accounts payable } & \$ 2,000 & \text { Miscellaneous expense } & \$ 1,030 \\\text { Accounts receivable } & 10,340 & \text { Office expense } & 1,240 \\\text { Cash } & 21,420 & \text { Supplies } & 1,670 \\\text { Fees earned } & 73,450 & \text { Wages expense } & 23,550 \\\text { Land } & 47,000 & \text { Drawing } & 16,570 \\\text { Building } & 157,630 & &\end{array}$ -Prepare a balance sheet for Thompson Computer Services for the current year ended March 31.

Harris Designers began operations on April 1. The financial statements for Harris Designers are shown below for the month ended April 30, (the first month of operations). Determine the missing amounts for letters (a) through (o).​ Place your answers in the space provided below. Hint: Use the interrelationships among the financial statements to solve this problem.

How does receiving a bill to be paid next month for services received affect the accounting equation?

Which of the following best describes accounting?

Within the United States, the dominant body in the primary development of accounting principles is the

Match the following business types with each business listed below. Each may be used more than once. -A supermarket

Managerial accountants would be responsible for providing information regarding

The initials GAAP stand for

Which of the following is not a role of accounting in business?