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Chapter 1 Test. College Accounting. Question: An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers is a(n)__?. Answer: Business.

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Chapter 1 Test


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chapter 1 test

Chapter 1 Test

College Accounting

slide2

Question: An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers is a(n)__?

Answer: Business

slide3

Question: A business organized under state or federal statutes as a separate legal entity is a(n)____?

Answer: Corporation

slide4

Question: A person or entity that has an interest in the economic performance of a business is called a(n) _________?

Answer: Business Stakeholder

slide5

Question: An information system that provides reports to stakeholders about the economic activities and condition of a business is _______?

Answer: Accounting

slide6

Question: Moral principles that guide the conduct of individuals are called _______?

Answer: Ethics

slide7

Question: A specialized field of accounting that uses estimated data to aid management in running day-to-day operations and in planning future operations is called _______ accounting.

Answer: Managerial

slide8

Question: A concept of accounting that requires that economic data be recorded in dollars is the___ __ ____ concept.

Answer: Unit of Measure

slide11

Question: Assets = liabilities + owners equity is the ________

________.

Answer: Accounting Equation

slide12

Question: Carson offered for sale at $75,000 land that had been purchased for $45,000. If Zimmer paid Carson $70,000 for the land – the amount Zimmer would record in the accounting records is ______.

Answer: $70,000

slide13

Question: The liability created by a purchase on account is referred to as a(n) ________ _________.

Answer: Account Payable

slide14

Question: If liabilities are $85,000 and owner’s equity is $45,000, the amount of the assets is _______.

Answer: $130,000

slide15

Question: If assets are $375,000 and owner’s equity is $295,000, the amount of the liabilities is ________.

Answer: $80,000

slide16

Question: The amount a business earns by selling goods or services to its customers is called _______.

Answer: Revenue

slide17

Question: If operations for an accounting period resulted in cash sales of $60,000, sales on account of $150,000, and expenses paid in cash of $195,000, the net income or (net loss) for the period is ________.

Answer: $15,000 Net Income

slide18

Question: A summary of the changes in the owner’s equity that have occurred during a specific period of time, such as a month or a year, is the _____

Answer: Statement of Owner’s Equity

slide19

Question: The owner’s equity at the beginning of the period was $19,000; at the end of the period, assets were $98,000 and liabilities were $41,000. The owner made no additional investments or withdrawals during the period. The net income or (net loss) for the period is ___________.

Answer: $38,000 Net Income

slide20

Question: The form of balance sheet that resembles the basic format of the accounting equation, with assets on the left side and the liabilities and owner’s equity sections on the right side, is called the ________ form.

Answer: Account

slide21

Question: If total assets increased by $85,000 and liabilities decreased by $9,000 during the period, the amount and direction (increase or decrease) of the period’s change in owner’s equity was _______.

Answer: $94,000 Increase

slide22

Question: A type of business that changes basic inputs into products that are sold to individual customers is a(n) __________ business.

Answer: Manufacturing

slide23

Question: A type of business that purchases products from other businesses and sells them to a customer is a(n) _________ business

Answer: Merchandising

slide25

Question: Individuals whom the owners have authorized to operate the business are called

Answer: Managers

slide26

Question: Authoritative body that has the primary responsibility for developing accounting principles is the

Answer: FASB

slide27

Question: FASB stands for what??

Answer: Financial Accounting Standards Board

slide28

Question: The rights of creditors that represent debts of the business are called?

Answer: Liabilities

slide29

Question: Items such as supplies that will be used in the business in the future are called

Answer: Prepaid Expenses

slide31

Question: If owner’s equity is $46,000 and liabilities are $34,000, the amount of assets is

Answer: $80,000

slide32

Question: A summary of the revenue and expenses for a specific period of time (month, year) is called a

Answer: Income Statement

slide33

Question: If operations for an accounting period resulted in cash sales of $90,000, sales on account of $40,000, and expenses paid in cash of $135,000, the net income or loss for the period is ?

Answer: Net loss of $5,000

slide34

Question: A list of assets, liabilities and owner’s equity as of a specific date is called

Answer: Balance Sheet

slide35

Question: The owner’s equity at the beginning of the period was $46,000; at the end of the period, assets were $99,000 and liabilities were $22,000. If the owner made an additional investment of $10,000, and withdrew $8,000 during the period , the net income or net loss would be

Answer: $29,000 Net Income

slide36

Question: The accounting concept that requires economic data be recorded in dollars is

A. Cost concept

B. Objectivity concept

C. Business entity concept

D. Unit of measure concept

true or false
True or False

Question:Accounting is often characterized as the “language of business.”

true or false1
True or False

Question: Accountants who render accounting services on a fee basis and staff accountants employed by them are said to be engaged in private accounting

true or false2
True or False

Question: Managerial accounting uses estimated data instead of financial accounting data to run day-to-day operations

true or false3
True or False

Question: The concept that expenses incurred in generating revenue should be matched against the revenue in determining net income or net loss is called the cost concept.

true or false4
True or False

Question:The financing activities section of the statement of cash flows includes cash transactions that enter into the determination of net income.

true or false5
True or False

Question:The debts of a business are called its accounts receivable.

true or false6
True or False

Question:A partnership is owned by not less then four individuals.

true or false7
True or False

Question:A business transaction is the occurrence of an event or of a condition that must be recorded.

true or false8
True or False

Question:A summary of the changes in the owner’s equity of a business entity that have occurred during a specific period of time, such as a month or a year, is called a statement of cash flows.

true or false9
True or False

Question:A claim against a customer for sales made on credit is an account payable.

true or false10
True or False

Question: An account payable is a claim against a customer arising from a sale that allows the customer to pay later.

true or false11
True or False

Question: If total assets increased by $75,000 during a specific period and liabilities decreased by $10,000 during the same period, the period’s change in total owner’s equity was an $85,000 increase.

earning revenue
Earning Revenue
  • Increases assets, increases liabilities
  • Increases one asset, decreases another asset
  • Decreases assets, increases liabilities
  • Increases assets, increases owner’s equity
debts owed by a business are referred to as
Debts owed by a business are referred to as
  • Assets
  • Liabilities
  • Equities
  • revenue
earning revenue1
Earning Revenue
  • Increases assets, increases liabilities
  • Increases one asset, decreases another asset
  • Decreases assets, increases liabilities
  • Increases assets, increases owner’s equity
how does the purchase of supplies on account affect the accounting equation
How does the purchase of supplies on account affect the accounting equation?
  • Assets increase; liabilities decrease
  • Assets increase; owner’s equity increases
  • Assets increase; liabilities increase
  • Liabilities increase; owner’s equity decreases