Accounting Chapter 1:

a resource that a business owns or controls

Asset

Which of the following statements describes the effect of expenses on equity?

Expenses cause equity to decrease

Which of the following statements represent(s) how expenses affect equity? (Check all that apply.)

If expenses increase, then total equity decreases. Higher expenses result in lower total equity.

Return on assets is computed as

Net Income divided by Average Total Assets.

Given the statements below, choose the most accurate definition of dividends.

Outflows of cash or other assets paid to the owners of a corporation

Which of the statement(s) below define(s) an asset? (Check all that apply.)

Resources with expected future benefits, An amount owned, Resources controlled by the business

The definition of revenues includes which of the following statements? (Check all that apply.)

Revenues are the sales of products or services to customers by a business. Revenues increase equity.

The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.

The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.

When recording transactions into the accounting equation, which of the following statements are correct? (Check all that apply.)

The accounting equation must always remain in balance. After recording the transaction, total assets will always equal total liabilities plus equity.

What are Generally Accepted Accounting Principles?

The concepts and rules that govern financial accounting practice.

Which of the following statements explain(s) how the accounting equation applies to businesses? (Check all that apply.)

The equation states that Assets = Liabilities + Equity. The relation of assets, liabilities and equity is reflected in the equation. The equation applies to all transactions and events. The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners.

Which of the following statements best represents the accounting equation?

The total of everything owned by a business must always equal the total of what the business owes to creditors and owners.

A process of analyzing data to identify meaningful relations and trends is called data

analytics

The FASB conceptual framework consists of all of the following except: elements qualitative characteristics objectives concepts recognition and measurement

concepts

Equity is composed of

contributed capital and retained earnings

On February 1, Russell's Consulting Services Company provided $1,000 of services to the local college. On February 1, Russell's collected $700, and the college will pay the balance next month. Record this transaction in the accounting equation on February 1 for Russell's Consulting Service by:

increasing both Cash and Accounts Receivable; and increasing Revenues

The accounts payable account is a(n) ______ account.

liability

A graphical presentation of data to help in understanding their significance is called data

visualization

Which of the following statements are true regarding the effect of revenues on the equity of a business?

Revenues that increase equity have many forms, such as consulting services and commissions from services. Revenues cause equity to increase.

the principle which states that accounting information is based on actual cost is called the

measurement principle

Generally accepted accounting principles (GAAP) wants information to have: (Check all that apply).

relevance faithful representation