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Accounting Coursework Help » Online Exam Help » Connect Financial Accounting Chapter 1 Quiz

Connect Financial Accounting Chapter 1 Quiz

financial accounting assignment helpQ1. Cragmont has beginning equity of $277,000, net income of $63,000, dividends of $25,000 and no additional investments by stockholders during the period. Its ending equity is:

  • $365,000
  • $239,000
  • $189,000
  • $315,000
  • $277,000

Q2. A company’s balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

  • $104,000
  • $76,000
  • $32,000
  • $68,000
  • $176,000

Q3. The Superior Company acquired a building for $500,000. The building was appraised at a value of $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Superior to record the building on its records at $500,000?

  • Monetary unit assumption
  • Going-concern assumption
  • Measurement (cost) principle
  • Business entity assumption
  • Revenue recognition principle

Q4. The assets of a company total $700,000; the liabilities, $200,000. What are the net assets?

  • $900,000
  • $700,000
  • $500,000
  • $200,000
  • It is impossible to determine unless the amount of stockholder investment is known

Q5. Cage Company had income of $350 million and average invested assets of $2,000 million. Its return on assets (ROA) is:

  • 1.8%
  • 35%
  • 17.5%
  • 5.7%
  • 3.5%

Q6. If equity is $300,000 and liabilities are $192,000, then assets equal:

  • $108,000
  • $192,000
  • $300,000
  • $492,000
  • $792,000

Q7. The accounting equation for Ying Company shows a decrease in its assets and a decrease in its equity. Which of the following transactions could have caused that effect?

  • Cash was received from providing services to a customer.
  • The company paid an amount due on credit.
  • Equipment was purchased for cash.
  • A utility bill was received for the current month, to be paid in the following month.
  • Advertising expense for the month was paid in cash.

Q8. If assets are $99,000 and liabilities are $32,000, then equity equals:

  • $32,000
  • $67,000
  • $99,000
  • $131,000
  • $198,000

Q9. Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

  • Going-concern assumption.
  • Expense recognition (Matching) principle.
  • Measurement (Cost) principle.
  • Business entity assumption
  • Consideration assumption.

Q10. Rushing had income of $150 million and average invested assets of $1,800 million. Its return on assets is:

  • 8.3%
  • 83.3%
  • 12%
  • 120%
  • 16.7%

Q11. An example of an investing activity is:

  • Stockholder investments.
  • Purchase of land.
  • Cash dividends paid.
  • Selling inventory.
  • Paying wages of employees.

Q12. Assets created by selling goods and services on credit are:

  • Accounts payable.
  • Expenses.
  • Equity.
  • Accounts receivable.
  • Liabilities.

Q13. The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:

  • Going-concern assumption.
  • Realization principle.
  • Measurement (Cost) principle.
  • Business entity assumption.
  • Accounting equation.

Q14. External users of accounting information include all of the following except:

  • Customers.
  • Shareholders.
  • Creditors.
  • Government regulators.
  • Purchasing managers.

Q15. The primary objective of financial accounting is to:

  • Serve the decision-making needs of internal users.
  • Know what, when, and how much product to produce.
  • Provide information on both the costs and benefits of looking after products and services.
  • Provide accounting information that serves external users.
  • Monitor consumer needs, tastes, and price concerns.

Q16. Resources a company owns or controls that are expected to yield future benefits are:

  • Revenues
  • Expenses
  • Liabilities
  • Assets
  • Owner’s Equity

Q17. Technology:

  • In accounting has replaced the need for decision makers.
  • Has not improved the clerical accuracy of accounting.
  • Reduces the time, effort and cost of record keeping.
  • Has replaced accounting.
  • In accounting is only available to large corporations.

Q18. If assets are $300,000 and liabilities are $192,000, then equity equals:

  • $192,000
  • $300,000
  • $792,000
  • $108,000
  • $492,000

Q19. The rule that (1) requires revenue to be recognized when goods or services are provided to customers and (2) at the amount expected to be received from the customer is called the:

  • Going-concern assumption.
  • Business entity assumption.
  • Measurement (Cost) principle.
  • Objectivity principle.
  • Revenue recognition principle.

Q20. An example of a financing activity is:

  • Buying land.
  • Obtaining a long-term loan.
  • Buying office supplies.
  • Selling inventory.
  • Buying office equipment.

Q21. Outflows of cash and other resources to stockholders are:

  • Revenues
  • Expenses
  • Liabilities
  • Dividends
  • Stock issuances.

Q22. The area of accounting aimed at serving the decision making needs of internal users is:

  • External auditing.
  • Managerial accounting.
  • SEC reporting
  • Bookkeeping.
  • Financial accounting.

Q23. A limited liability company (LLC):

  • Is the same as a corporation.
  • Includes a general owner with unlimited liability.
  • Has owners called members.
  • Must have more than one owner.
  • Is subject to double taxation.

Q24. The group that sets international preferred accounting practices is called the:

  • IASB
  • CAP
  • FASB
  • SEC
  • AICPA

Q25. Revenue is properly recognized:

  • At the end of the accounting period.
  • When cash from a sale is received.
  • When the customer makes an order.
  • Only if the transaction creates an account receivable.
  • When goods or services are provided to customers and at the amount expected to be received from the customer.

Q26. An example of an operating activity is:

  • Paying off a loan.
  • Selling stock.
  • Paying wages.
  • Purchasing office equipment.
  • Borrowing money from a bank.

Q27. Creditors’ claims on the assets of a company are called:

  • Equity
  • Expenses
  • Net Losses
  • Revenues
  • Liabilities

Q28. Which of the following is not true regarding ethics:

  • Are critical in accounting.
  • Good ethics are good business.
  • Ethics are beliefs that distinguish right from wrong.
  • Ethics are accepted standards of good and bad behavior.
  • Ethics do not affect the operations or outcome of a company.

Q29. The Securities and Exchange Commission (SEC) has given the task of setting GAAP to the:

  • FASB
  • APB
  • AICPA
  • IASB
  • AAA

Q30. Net Income:

  • Is the excess of revenues over expenses.
  • Represents the amount of assets owners put into a business.
  • Decreases equity.
  • Equals assets minus liabilities.
  • Represents owners’ claims against assets.

Q31. When expenses exceed revenues, the result is called:

  • Net loss.
  • Net income.
  • Negative equity.
  • A liability.
  • Net assets.

Q32. The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

  • Revenue recognition principle.
  • Going-concern assumption.
  • Time-period assumption.
  • Measurement (Cost) principle
  • Business entity assumption.

Q33. Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

  • Measurement (Cost) principle
  • Going-concern assumption.
  • Expense recognition (Matching) principle.
  • Consideration assumption.
  • Business entity assumption.

Q34. The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

  • Monetary unit assumption
  • Going-concern assumption.
  • Objectivity principle.
  • Business entity assumption.
  • Measurement (Cost) Principle.

Q35. A corporation is:

  • The same as a limited liability partnership.
  • Not subject to double taxation.
  • Not responsible for its own acts and own debts.
  • A business legally separate from its owners.
  • Controlled by the FASB.

Q36. Operating activities:

  • Involve using resources to research, develop, purchase, produce, distribute and market products and services
  • Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services.
  • Are the means organizations use to pay for resources like land, buildings and equipment.
  • Are also called asset management.
  • Are also called strategic management.

Q37. Increases in equity from a company’s sales of products or services are:

  • Stockholders’ Equity.
  • Revenues
  • Expenses
  • Liabilities
  • Assets

Q38. A partnership:

  • Has to have a written agreement in order to be legal.
  • Is a legal organization separate from its owners.
  • Has owners called shareholders.
  • Is also called a sole proprietorship.
  • Has unlimited liability for its partners.

Q39. To include the personal assets and transactions of a business’s owner(s) in the records and reports of the business would be in conflict with the:

  • Business entity assumption.
  • Objectivity principle.
  • Revenue recognition principle.
  • Going-concern assumption.
  • Monetary unit assumption.

Q40. The description of the relation between a company’s assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

  • Business equation
  • Income statement equation.
  • Net income.
  • Accounting equation.
  • Return on equity ratio.