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Exam 1: Introduction to Accounting and Business

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Question 1

Multiple Choice

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Financial reports that allow users to identify the similarities and differences among reported items are said to demonstrate

A) timeliness
B) understandability
C) comparability
D) verifiability

E) B) and C)
F) C) and D)

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verified

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Question 2

True/False

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No significant differences exist between the accounting standards issued by the FASB and the IASB.

A) True
B) False

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Question 3

Multiple Choice

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Which type of accountant typically practices as an individual or as a member of a public accounting firm?

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

Which of the following is true in regards to a limited liability company?

Revenue is earned only when money is received.

Match each of the following characteristics with the financial statement it describes. Each financial statement may be used more than once. -The connecting link between the income statement and balance sheet A)Income statement B)Balance sheet C)Statement of stockholder's equity D)Statement of cash flows

Based on this information, is Scott Industries profitable? Explain your answer.

An example of a general-purpose financial statement would be a report about projected price increases related to transportation costs.

Give the major disadvantage of disregarding the cost principle and constantly revaluing assets based on appraisals and opinions.

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Payment for common stock by stockholder 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

Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management.

Identify each of the following as an (1) increase to stockholders' equity, or a (2) decrease to stockholders' equity.(a)Fees earned (b)Wages expense (c)Dividends (d)Lawn care revenue (e)Investment (f)Supplies expense

Redfox Pest Control Service had revenues of $425,000 and expenses of $338,000 for the current year, ended June 30. At the beginning of the year, the common stock was $110,000 and the retained earnings was $70,000. During the year, shareholders purchased an additional $25,000 in stock. Dividends of $16,750 were paid. What is the balance of stockholders' equity at the end of the year?

The accounting equation may be expressed as

On May 7, Carpet Barn Company offered to pay $83,000 for land that had a selling price of $105,000. On May 15, Carpet Barn accepted a counteroffer of $95,000. On June 5, the land was assessed at a value of $115,000 for property tax purposes. On December 10, Carpet Barn Company was offered $135,000 for the land by another company. At what value should the land be recorded in Carpet Barn Company's records?

Which of the following are guidelines for behaving ethically? I.Identify the consequences of a decision and its effect on others.II.Consider your obligations and responsibilities to those affected by the decision.III.Identify your decision based on personal standards of honesty and fairness.

There are four transactions that affect stockholders' equity.​ (a) What are the two types of transactions that increase stockholders' equity? (b) What are the two types of transactions that decrease stockholders' equity?

Determine the missing amount "X" for each of the following:

Identify which of the following accounts would appear on a balance sheet.(a)Cash (b)Fees earned (c)Common stock (d)Wages payable (e)Rent expense (f)Supplies (g)Land