CHAPTER/HOMEWORK QUIZ CHAPTER 1

THE FINANCIAL STATEMENT THAT SUMMARIZES THE FINANCIAL POSITION OF A COMPANY IS THE

BALANCE SHEET

THE [______________} ASSUMPTION REQUIRES THAT THE ACTIVITIES OF AN ENTITY BE KEPT SEPARATE FROM THE ACTIVITIES OF ITS OWNER.

ECONOMIC ENTITY

THE FIRST STEP IN SOLVING AN ETHICAL DILEMMA IS TO

recognize an ethical situation and the ethical issues involved.

IF EXPENSES ARE PAID IN CASH, THEN

ASSETS WILL DECREASE

IS THE COMPANY OPERATING WITHIN PRESCRIBED GUIDELINES

REGULATORY AGENCY

STOCKHOLDERS' EQUITY IS INCREASED BY

REVENUE

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ARE

STANDARDS THAT INDICATE HOW TO REPORT ECONOMIC EVENTS

INDICATE WHICH OF THE ITEMS IS AN ASSET, LIABILITY OR STOCKHOLDERS' EQUITY ACCOUNT.

SUPPLIES = ASSETS DIVIDENDS = STOCKHOLDERS' EQUITY BUILDINGS = ASSETS NOTES PAYABLE = LIABILITY SALARIES & WAGES PAYABLE = LIABILITY

A BASIC ASSUMPTION OF ACCOUNTING ASSUMES THAT THE DOLLAR IS

THE COMMON UNIT OF MEASURE FOR ALL BUSINESS TRANSACTIONS

Accounting communicates financial information about a business enterprise to both internal and external users.

TRUE

At October 1, Arcade Fire Enterprises reported stockholders' equity of $70,000. During October, no stock was issued and the company earned net income of $18,000. If stockholders' equity at October 31 totals $78,000, what amount of dividends were paid during the month?

$10K

IF TOTAL LIABILITIES DECREASED BY $30K AND STOCKHOLDERS' EQUITY DECREASED BY $20K DURING A PERIOD OF TIME, THEN TOTAL ASSETS MUST CHANGE BY WHAT AMOUNT AND DIRECTION DURING THAT SAME PERIOD?

$50K DECREASE

IS THE COMPANY ABLE TO PAY ITS DEBTS

CREDITOR

WHICH OF THE FOLLOWING WOULD NOT BE CONSIDERED INTERNAL USERS OF ACCOUNTING DATA FOR A COMPANY?

CREDITORS OF A COMPANY

INTERNAL TRANSACTIONS DO NOT AFFECT THE BASIC ACCOUNTING EQUATION BECAUSE THEY ARE ECONOMIC EVENTS THAT OCCUR ENTIRELY WITHIN ONE COMPANY

FALSE

IS THE COMPANY COMPLYING WITH TAX LAWS

INTERNAL REVENUE SERVICE

IS THE COMPANY A GOOD INVESTMENT

INVESTOR