Question 1

All of the following are true regarding ethics except:

Accepted Answer

A)  Ethics are beliefs that distinguish right from wrong.
B)  Ethics rules are often set for CPAs.
C)  Ethics do not affect the operations or outcome of a company.
D)  Are critical in accounting.
E)  Ethics can be difficult to apply.F) B) and C)
G) A) and E)

Question 2

Ethical behavior requires that:

Accepted Answer

A)  Auditors' pay not depend on the success of the client's business.
B)  Auditors invest in businesses they audit.
C)  Analysts report information favorable to their companies.
D)  Managers use accounting information to benefit themselves.
E)  Auditors' pay depends on the success of the client's business.F) None of the above
G) All of the above

Question 3

Explain the accounting equation and define its terms.

Accepted Answer

The accounting equation is stated as: As...

Question 4

What distinguishes liabilities from equity?

Accepted Answer

Liabilities are creditors' claims on ass...

Question 5

The income statement reports on operating activities at a point in time.

Accepted Answer

A) True 
 B)False

Question 6

The characteristics below apply to at least one of the forms of business organization.
a.Is a separate legal entity.
b.Is allowed to be owned by one person only.
c.Owner or owners are personally liable for debts of the business.
d.Is a separately taxable entity.
e.Is a business entity.
f.May have a contract specifying the division of profits among the owners.
g.Has an unlimited life
Use the following format to indicate (with a "yes" or "no")whether or not a characteristic applies to each type of business organization.

Accepted Answer

The answer of The characteristics below apply to at least...

Question 7

Saddleback Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Accepted Answer

A)  Assets,$30,000 increase; equity,$30,000 increase.
B)  Assets,$30,000 decrease; liabilities,$30,000 decrease.
C)  Assets,$30,000 decrease; liabilities,$30,000 increase.
D)  Liabilities,$30,000 decrease; equity,$30,000 increase.
E)  Assets,$30,000 decrease; equity $30,000 decrease.F) A) and B)
G) All of the above

Question 8

Objectivity means that financial information is supported by independent,unbiased evidence; it demands more than a person's opinion.

Accepted Answer

A) True 
 B)False

Question 9

The business entity assumption:

Accepted Answer

A)  Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
B)  Means that we can express transactions and events in monetary,or money,units.
C)  Presumes that the life of a company can be divided into time periods,such as months and years,and that useful reports can be prepared for those periods.
D)  Means that a business is accounted for separately from other business entities,including its owners.
E)  Prescribes that a company record the expenses it incurred to generate the revenue reported.F) B) and C)
G) A) and C)

Question 10

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of equity as of August 31 of the current year?

Accepted Answer

A)  $49,100.
B)  $32,100.
C)  $12,100.
D)  $10,900.
E)  $30,900.F) A) and B)
G) A) and E)

Question 11

The Sarbanes-Oxley Act (SOX)requires a business that sells stock to disclose a code of ethics for its executives.

Accepted Answer

A) True 
 B)False

Question 12

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Accepted Answer

A) True 
 B)False

Question 13

Return on assets (ROA)is also known as return on investment (ROI).

Accepted Answer

A) True 
 B)False

Question 14

External users of accounting information do not directly run the organization and have limited access to its accounting information.

Accepted Answer

A) True 
 B)False

Question 15

The primary objective of financial accounting is to:

Accepted Answer

A)  Serve the decision-making needs of internal users.
B)  Provide accounting information that serves external users.
C)  Monitor and control company activities.
D)  Provide information on both the costs and benefits of looking after products and services.
E)  Know what,when,and how much product to produce.F) C) and E)
G) B) and C)

Question 16

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

Accepted Answer

A) True 
 B)False

Question 17

How does the objectivity principle support ethical behavior?

Accepted Answer

The objectivity principle supports ethic...

Question 18

On December 15 of the current year,Conrad Accounting Services signed a $40,000 contract with a client to provide bookkeeping services to the client in the following year.The client paid the entire $40,000 on the date the contract was signed.Which accounting principle would require Conrad Accounting Services to record the bookkeeping revenue in the following year and not the year the cash was received?

Accepted Answer

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

Question 19

Generally accepted accounting principles are the basic assumptions,concepts,and guidelines for preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 20

The assumption that requires that a business be accounted for separately from its owners is the ________ assumption.

Accepted Answer

The answer of The assumption that requires that a business...

Exam 1: Introducing Financial Statements

The income statement reports on operating activities at a point in time.

Correct Answer
verified

Generally accepted accounting principles are the basic assumptions,concepts,and guidelines for preparing financial statements.

Correct Answer
verified

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

Correct Answer
verified

How does the objectivity principle support ethical behavior?

Correct Answer
verified
The objectivity principle supports ethic...
View Answer

The Sarbanes-Oxley Act (SOX)requires a business that sells stock to disclose a code of ethics for its executives.

Correct Answer
verified

Objectivity means that financial information is supported by independent,unbiased evidence; it demands more than a person's opinion.

Correct Answer
verified

Correct Answer
verified

Saddleback Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Correct Answer
verified

The assumption that requires that a business be accounted for separately from its owners is the ________ assumption.

Correct Answer
verified

Ethical behavior requires that:

Correct Answer
verified

The business entity assumption:

Correct Answer
verified

Explain the accounting equation and define its terms.

Correct Answer
verified
The accounting equation is stated as: As...
View Answer

All of the following are true regarding ethics except:

Correct Answer
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The primary objective of financial accounting is to:

Correct Answer
verified

Return on assets (ROA)is also known as return on investment (ROI).

Correct Answer
verified

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of equity as of August 31 of the current year?

Correct Answer
verified

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Correct Answer
verified

What distinguishes liabilities from equity?

Correct Answer
verified
Liabilities are creditors' claims on ass...
View Answer

Correct Answer
verified

External users of accounting information do not directly run the organization and have limited access to its accounting information.

Correct Answer
verified

Exam 1: Introducing Financial Statements

The income statement reports on operating activities at a point in time.

Correct AnswerverifiedShow Answer

Generally accepted accounting principles are the basic assumptions,concepts,and guidelines for preparing financial statements.

Correct AnswerverifiedShow Answer

Ending retained earnings reported on the statement of retained earnings is calculated by adding stockholder investments and net losses and subtracting net income and dividends.

Correct AnswerverifiedShow Answer

How does the objectivity principle support ethical behavior?

Correct AnswerverifiedThe objectivity principle supports ethic...View AnswerShow Answer

The Sarbanes-Oxley Act (SOX)requires a business that sells stock to disclose a code of ethics for its executives.

Correct AnswerverifiedShow Answer

Objectivity means that financial information is supported by independent,unbiased evidence; it demands more than a person's opinion.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Saddleback Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Correct AnswerverifiedShow Answer

The assumption that requires that a business be accounted for separately from its owners is the ________ assumption.

Correct AnswerverifiedShow Answer

Ethical behavior requires that:

Correct AnswerverifiedShow Answer

The business entity assumption:

Correct AnswerverifiedShow Answer

Explain the accounting equation and define its terms.

Correct AnswerverifiedThe accounting equation is stated as: As...View AnswerShow Answer

All of the following are true regarding ethics except:

Correct AnswerverifiedShow Answer

The primary objective of financial accounting is to:

Correct AnswerverifiedShow Answer

Return on assets (ROA)is also known as return on investment (ROI).

Correct AnswerverifiedShow Answer

On August 31 of the current year,the assets and liabilities of Gladstone,Inc.are as follows: Cash $30,000; Supplies,$600; Equipment,$10,000; Accounts Payable,$8,500.What is the amount of equity as of August 31 of the current year?

Correct AnswerverifiedShow Answer

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Correct AnswerverifiedShow Answer

What distinguishes liabilities from equity?

Correct AnswerverifiedLiabilities are creditors' claims on ass...View AnswerShow Answer

Correct AnswerverifiedShow Answer

External users of accounting information do not directly run the organization and have limited access to its accounting information.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
The objectivity principle supports ethic...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The accounting equation is stated as: As...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Liabilities are creditors' claims on ass...
View Answer

Correct Answer
verified

Correct Answer
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