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Exam 1: Introduction to Accounting and Business

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Question 31

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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. -Used by large businesses A)Proprietorship B)Partnership C)Corporation D)Limited liability company (LLC)

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Question 32

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Match the following business types with each business listed below. Each may be used more than once. -An automobile dealer A)Service business B)Manufacturing business C)Retail business

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Question 33

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Receiving a bill or otherwise being notified that an amount is owed is not recorded until the amount is paid.

The financial statements of a proprietorship should include the owner's personal assets and liabilities.

The basic difference between manufacturing and retail companies is the completion level of the products they purchase for resale to customers.

Which of the following is a manufacturing business?

A fiscal year that ends when business activities have reached their lowest point is called the natural business year.

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Received utility bill to be paid next month A)Increase assets, increase liabilities B)Increase liabilities, decrease stockholders' equity C)Increase assets, increase stockholders' equity D)No effect E)Decrease assets, decrease liabilities F)Decrease assets, decrease stockholders' equity

Explain the interrelationship between the balance sheet and the statement of cash flows.

Which of the following groups are considered to be internal users of accounting information?

Accounting information users need reports about the economic activities and condition of businesses.

Transactions affecting stockholders' equity include

If the liabilities owed by a business total $300,000 and stockholders' equity is equal to $300,000, then the assets also total $300,000.

On March 1, the amount of common stock and retained earnings in Richard's Catering Company was $100,000 and $50,000, respectively. During March, stockholders were paid $31,000 in dividends from the business. The amounts of the various assets, liabilities, revenues, and expenses are as follows: Present, in good form, (a) an income statement for March, (b) a statement of stockholder's equity for March, and (c) a balance sheet as of March 31.

Liabilities are reported on the

Which of the following is not a certification for accountants?

Some of the major fraudulent acts by senior executives started as what they considered to be small ethical lapses which grew out of control.

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Generates 90% of business revenues A)Proprietorship B)Partnership C)Corporation D)Limited liability company (LLC)

Dave Ryan is the CEO of Ryan's Arcade. At the end of its accounting period, December 31, Ryan's Arcade has assets of $450,000 and liabilities of $125,000. Using the accounting equation, determine the following amounts: (a)stockholders' equity as of December 31 of the current year (b)stockholders' equity as of December 31 at the end of the next year, assuming that assets increased by $65,000 and liabilities increased by $35,000 during the year

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Paid cash for the purchase of supplies A)Increase assets, increase liabilities B)Increase liabilities, decrease stockholders' equity C)Increase assets, increase stockholders' equity D)No effect E)Decrease assets, decrease liabilities F)Decrease assets, decrease stockholders' equity