Question 1

Which of the following statements is TRUE of an income statement?

Accepted Answer

A)  There is net income when total expenses are greater than total revenues.
B)  There is a net loss when total expenses are less than total revenue.
C)  There is a net loss when total expenses are greater than total liabilities.
D)  There is net income when total revenues are greater than total expenses.E) All of the above
F) B) and D)

Question 2

Which of the following appears on both the income statement and statement of owner's equity?

Accepted Answer

A)  Owner,Capital,ending balance
B)  Total revenues
C)  Net income
D)  Owner,WithdrawalsE) B) and D)
F) A) and B)

Question 3

Mulberry Company collected $7,000 from one of its customers,the amount owed from the previous month.How does this affect the accounting equation for Mulberry?

Accepted Answer

A)  assets increase by $7,000;liabilities decrease by $7,000
B)  assets increase by $7,000;assets decrease by $7,000
C)  assets increase by $7,000;liabilities increase by $7,000
D)  assets increase by $7,000;equity increases by $7,000E) B) and C)
F) A) and D)

Question 4

A creditor is any person who has an ownership interest in a business.

Accepted Answer

A) True 
 B)False

Question 5

Accounting is referred to as the language of business because it is the method of communicating business information to decision makers.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following organizations is responsible for the creation and governance of accounting standards in the United States?

Accepted Answer

A)  Financial Accounting Standards Board
B)  Institute of Management Accountants
C)  American Institute of Certified Public Accountants
D)  Securities and Exchange CommissionE) All of the above
F) B) and C)

Question 7

Match the accounting position to the job description.
-Auditor

Accepted Answer

A)  Specializes in accounting and financial management knowledge
B)  Serves the general public
C)  Performs reviews of companies to ensure compliance to rules and regulations
D)  Compiles financial statements, interacts with auditors, oversees regulatory reportingE) A) and C)
F) C) and D)

Question 8

Define assets.Provide three examples of assets.

Accepted Answer

Assets are economic resources that are e...

Question 9

Jones Supply Services paid $350 cash,the amount owed from the previous month,to a materials supplier.Which of the following accounts decrease?

Accepted Answer

A)  Accounts Receivable
B)  Accounts Payable
C)  Jones,Capital
D)  Office SuppliesE) B) and D)
F) C) and D)

Question 10

The income statement is also called the statement of earnings.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is TRUE of a sole proprietorship?

Accepted Answer

A)  A sole proprietorship joins two or more individuals as co-owners.
B)  The sole proprietor is personally liable for the liabilities of the business.
C)  A sole proprietorship is taxed separately from the owner.
D)  A sole proprietorship has to pay business income taxes.E) B) and C)
F) A) and B)

Question 12

An owner's withdrawal represents an expense of the business.

Accepted Answer

A) True 
 B)False

Question 13

The owner's capital account decreases with ________.

Accepted Answer

A)  net income
B)  the purchase of long-term assets
C)  the owner's contributions
D)  the owner's withdrawalsE) B) and C)
F) A) and D)

Question 14

The most that the owner of a sole proprietorship can lose,as a result of business debts or lawsuits,is the amount he/she has invested in the business.

Accepted Answer

A) True 
 B)False

Question 15

Business owners use accounting information to set goals,evaluate progress toward those goals,and make adjustments when needed.

Accepted Answer

A) True 
 B)False

Question 16

By looking at a statement of owner's equity,the effect of the owner's withdrawals on the ending balance of capital can be determined.

Accepted Answer

A) True 
 B)False

Question 17

Liabilities represent creditors' claims on the business's assets.

Accepted Answer

A) True 
 B)False

Question 18

Wylie Company has just completed operations for the year ended December 31,2018.This is the second year of operations for the company.The company is a sole proprietorship.The following data have been assembled for the business.There were no new capital contributions during the year.
  Prepare the balance sheet at December 31,2018.Use a proper heading.

Accepted Answer

The answer of Wylie Company has just completed operations for...

Question 19

What is the calculation for return on assets (ROA)? What does ROA measure?

Accepted Answer

Return on Assets = Net income ...

Question 20

The guidelines for accounting information are called Generally Accepted Accounting Principles (GAAP).

Accepted Answer

A) True 
 B)False

Exam 1: Accounting and the Business Environment

The income statement is also called the statement of earnings.

Correct Answer
verified

Define assets.Provide three examples of assets.

Correct Answer
verified
Assets are economic resources that are e...
View Answer

Match the accounting position to the job description. -Auditor

Correct Answer
verified

Which of the following organizations is responsible for the creation and governance of accounting standards in the United States?

Correct Answer
verified

Which of the following statements is TRUE of an income statement?

Correct Answer
verified

Business owners use accounting information to set goals,evaluate progress toward those goals,and make adjustments when needed.

Correct Answer
verified

Accounting is referred to as the language of business because it is the method of communicating business information to decision makers.

Correct Answer
verified

Mulberry Company collected $7,000 from one of its customers,the amount owed from the previous month.How does this affect the accounting equation for Mulberry?

Correct Answer
verified

What is the calculation for return on assets (ROA)? What does ROA measure?

Correct Answer
verified
Return on Assets = Net income ...
View Answer

By looking at a statement of owner's equity,the effect of the owner's withdrawals on the ending balance of capital can be determined.

Correct Answer
verified

The guidelines for accounting information are called Generally Accepted Accounting Principles (GAAP).

Correct Answer
verified

Which of the following appears on both the income statement and statement of owner's equity?

Correct Answer
verified

The most that the owner of a sole proprietorship can lose,as a result of business debts or lawsuits,is the amount he/she has invested in the business.

Correct Answer
verified

The owner's capital account decreases with ________.

Correct Answer
verified

Jones Supply Services paid $350 cash,the amount owed from the previous month,to a materials supplier.Which of the following accounts decrease?

Correct Answer
verified

An owner's withdrawal represents an expense of the business.

Correct Answer
verified

Correct Answer
verified

Liabilities represent creditors' claims on the business's assets.

Correct Answer
verified

A creditor is any person who has an ownership interest in a business.

Correct Answer
verified

Which of the following statements is TRUE of a sole proprietorship?

Correct Answer
verified

Exam 1: Accounting and the Business Environment

The income statement is also called the statement of earnings.

Correct AnswerverifiedShow Answer

Define assets.Provide three examples of assets.

Correct AnswerverifiedAssets are economic resources that are e...View AnswerShow Answer

Match the accounting position to the job description. -Auditor

Correct AnswerverifiedShow Answer

Which of the following organizations is responsible for the creation and governance of accounting standards in the United States?

Correct AnswerverifiedShow Answer

Which of the following statements is TRUE of an income statement?

Correct AnswerverifiedShow Answer

Business owners use accounting information to set goals,evaluate progress toward those goals,and make adjustments when needed.

Correct AnswerverifiedShow Answer

Accounting is referred to as the language of business because it is the method of communicating business information to decision makers.

Correct AnswerverifiedShow Answer

Mulberry Company collected $7,000 from one of its customers,the amount owed from the previous month.How does this affect the accounting equation for Mulberry?

Correct AnswerverifiedShow Answer

What is the calculation for return on assets (ROA)? What does ROA measure?

Correct AnswerverifiedReturn on Assets = Net income ...View AnswerShow Answer

By looking at a statement of owner's equity,the effect of the owner's withdrawals on the ending balance of capital can be determined.

Correct AnswerverifiedShow Answer

The guidelines for accounting information are called Generally Accepted Accounting Principles (GAAP).

Correct AnswerverifiedShow Answer

Which of the following appears on both the income statement and statement of owner's equity?

Correct AnswerverifiedShow Answer

The most that the owner of a sole proprietorship can lose,as a result of business debts or lawsuits,is the amount he/she has invested in the business.

Correct AnswerverifiedShow Answer

The owner's capital account decreases with ________.

Correct AnswerverifiedShow Answer

Jones Supply Services paid $350 cash,the amount owed from the previous month,to a materials supplier.Which of the following accounts decrease?

Correct AnswerverifiedShow Answer

An owner's withdrawal represents an expense of the business.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Liabilities represent creditors' claims on the business's assets.

Correct AnswerverifiedShow Answer

A creditor is any person who has an ownership interest in a business.

Correct AnswerverifiedShow Answer

Which of the following statements is TRUE of a sole proprietorship?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Assets are economic resources that are e...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Return on Assets = Net income ...
View 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
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Correct Answer
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Correct Answer
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