Accounting Exam 1

Which of the following factors is not a component of the fraud triangle? A.) Opportunity B.) Pressure C.) Rationalization D.) All of the above are components of the fraud triangle

All of the above are components of the fraud triangle

The accounting process begins with: A.) Analysis of business transactions and source documents B.) Preparing financial statements and other reports C.) Analysis of prepared financial statements D.) Presentation of financial information to decision-makers E.) Preparation of the trial balance

Analysis of business transactions and source documents

Identify the accounts that would normally have balances in the debit column of a business's trial balance: A.) Assets and expenses B.) Assets and revenues C.) Revenues and expenses D.) Liabilities and expenses E.) Liabilities and dividends

Assets and expenses

If a company receives $12,000 from a stockholder , the effect on the accounting equation would be: A.) Assets decrease $12,000; equity decreases $12,000 B.) Assets increase $12,000; liabilities decrease $12,000 C.) Assets increase $12,000; liabilities increase $12,000 D.) Liabilities increase $12,000; equity decreases $12,000 E.) Assets increase $12,000; equity increase $12,000

Assets increase $12,000; equity increase $12,000

Victor Cruz contributed $70,000 in cash and land worth $130,000 to open a new business, VC Consulting, in exchange for common stock. Which of the following general journal entries will VC Consulting make to record this transaction?

Debit cash $70,000 and land $130,000; Credit common stock $200,000

Web consulting received $3,000 from a customer services provided. The general journal entry to record the transaction will be: A.) Debit services revenue, credit accounts receivable B.) Debit cash, credit accounts payable C.) Debit cash, credit accounts receivable D.) Debit cash, credit services revenue E.) Debit accounts payable, credit services revenue

Debit cash, credit services revenue

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 accounting principle that requires account 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:

Measurement (Cost) Principle

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

Provide accounting information that serves external users

If Houston Company billed a client for $10,000 of consulting work completed, the accounts receivable asset increases by $10,000 and: A.) Accounts payable decreases $10,000 B.) Accounts payable increases $10,000 C.) Cash increases $10,000 D.) Revenue increases $10,000 E.) Revenue decreases $10,000

Revenue increases $10,000

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:

Revenue recognition principle

The basic financial statements include all of the following except: A.) Balance Sheet B.) Income Statement C.) Statement of Retained Earnings D.) Statement of Cash Flows E.) Statement of Changes in Assets

Statement of changes in assets

A tool that represents a ledger account and is used to show the effects of transactions is called a:

T-account

A company's list of accounts and the identification numbers assigned to each account is called a:

chart of accounts

Involves using resources to research, develop, purchase, produce, distribute, and market products and services

operating activities

Liabilities created when a customers pays in advance for products and services before the revenue is earned

unearned revenue