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Exam 1: Introduction to Accounting and Business

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Question 31

Multiple Choice

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The accounting equation may be expressed as

A) Assets = Equities - Liabilities
B) Assets + Liabilities = Stockholders' Equity
C) Assets = Revenues - Liabilities
D) Assets - Liabilities = Stockholders' Equity

E) None of the above
F) A) and C)

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Question 32

Multiple Choice

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Countries outside the United States use financial accounting standards issued by the

A) LLC
B) SEC
C) IASB
D) GAAP

E) All of the above
F) None of the above

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Question 33

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At December 31,2011,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.Total Stockholders' Equity as of December 31,2011. b.Total Stockholders' Equity as of December 31,2012,assuming that assets increased by $12,000 and liabilities increased by $15,000 in 2012. c.Total Stockholders' Equity as of December 31,2012,assuming that assets decreased by $8,000 and liabilities increased by $14,000 during 2012.

Revenues are reported when

An example of an external user of accounting information is the federal government.

Expenses are recorded when

Which of the following financial statements reports information as of a specific date?

The initials GAAP stand for

Cash investments made by stockholders in exchange for capital stock in a business are reported on the statement of cash flows in the

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period,the period's change in total stockholder's equity was a $200,000 increase.

Bob Johnson is the sole stockholder of Johnson's Carpet Cleaning Service.Bob purchased a personal automobile for $10,000 cash plus he took loan for $20,000 in his name.Describe how this transaction is related to the business entity concept.

If total assets decreased by $88,000 during a period of time and stockholders' equity increased by $71,000 during the same period,then the amount and direction (increase or decrease) of the period's change in total liabilities is

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

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time,such as a month or year,is called a(n)

The main objective of a not-for-profit business is not to make a profit.

Determine the missing amount for each of the following:

Collins Landscape Company purchased various landscaping supplies on account to be used for landscape designs for its customers.How will this business transaction affect the accounting equation?

What information does the income statement give to business users?

Which of the following is not a business transaction?

Selected transactions completed by a corporation are described below.Indicate the effects of each transaction on assets,liabilities,and stockholders' equity by inserting "+" for increase and "-" for decrease in the appropriate columns at the right.If appropriate,you may insert more than one symbol in a column.