Acc exam 1

If equity is 300,000 and liabilities are 182,000 then assets equals to: A) 108,000 B) 192,000 C) 300,000 D) 492,000 E) 792,000

492,000

The description of the relation between a company's assets, liabilities, and equity, which is expressed as an Assets= Liabilities + Equity is known as A) income statement equation B) Accounting Equation C) Business equation D) Return in equity ratio E) Net income

Accounting equation

Assets created by selling goods and services on credit are A) accounts payable B) accounts receivable C) liabilities D) expenses E) Equity

Accounts receivable

An exchange of value between two entities that yields a change in the accounting equation is called A) The accounting equation B) Recordkeeping or bookkeeping C) an external transaction D) an asset E) net income

And external transactions

Resources a company owns or controls that are expected to yield future benefits are A) assets B) revenues C) liabilities D) owners equity E) expenses

Assets

Increase in equity from a company's sales of product or services are A) assets B) Revenue C) Liabilities D) owners equity E) Expenses

B) Revenue

The accounting concept that requires every business to be accounted for separately from other business and entities including its owner or owners is known as the A) Time periodAssumption B) Business entity assumption C) going concern assumption D) revenue recognition principle E) measurement (cost)principle

Business entity assumption

External users of accounting information include all of the following except: A) shareholder B) customers C) purchasing managers D) Government regulators E) creditors

Customers

Accounting is an information and measurement system that does all of the following EXCEPT A) Identifies business activities B) records business activities C) Communicates business activities D) Eliminates the need for interpreting financial data E) Helps people make better decisions

Eliminates the need for interpreting financial data

The difference between a company's asset and its liabilities or net assets is A) Net income B) Expense C) Equity D) Revenue E) Net loss

Equity

Decrease in equity from costs of providing products or services to costumers are called A) Liabilities B) Equity C) Withdrawals D) Expenses E) Owners investment

Expense

Distributions of cash or other resources by a business to its owners are called A) withdrawl B) expense C) assets D) retained earning E) net income

Expenses

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 A) going concern assumption B) Business entity assumption C) objectivity assumption D) measurement cost principle E) monetary unit assumption

Going concern assumption

Net income A) decrease equity B) Represents the amount of assets owners put into business C) equals asset minus liability D) is the excess of revenues over expenses E) Represents owners claims against assets

Is the excess of revenues over expenses

Creditors claim on the assets of company called A) Net loss B) Expense C) Revenues D) Equity E) Liabilities

Liabilities

The area of accounting aimed at serving the decision making needs of external user is; A) Financial accounting B) managerial accounting C) External auditing D) SEC reporting E) Bookkeeping

Managerial accounting

When expenses exceed revenues the result is called A) Net assets B) Negative equity C) net loss D) net income E) A liability

Net loss

The primary objective of financial accounting is to A) Serve the decisión-making needs to internal users B) Provide accounting information that serves external users C) monitors consumer needs, tastes, and price control D) Provide information on both the costs and benefits of looking after products and services E) Know what when and how much product the produce

Provide Accounting information that serves external use

Revenue is properly recognized A) when the customer makes an order B) only if the trans action create an account receivable C) at the end of the accounting period D) when goods or services are provided to customers and at the amount expected to be received from the customer E) when cash from sale is received

When goods or services are provided to customers at the amount expected to be received from the customer

A resource that the owner takes from the company is called a A) liability B) withdrawal C) expense D) contribution E) Investment

Withdrawl

Revenues are: A) the same as Net income B) The excess of expense over assets C) Resource owned or controlled by a company D) the increase in equity from a company's sale of products and services E) The cost of assets or service used

the i crease in equity from a company's sale of product and service