MANAG ACT CH.1

If a company is considering the purchase of a parcel of land that was aquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at:

$137,000

The description of the relation between a company's assets, liabilities, and equity which is expressed as assets=liabilities + assets

Accounting equation

Ethical Behavior

Auditors pay not depend on the success of the clients business

Marsha Bogswell is the sole stockholder of Bogswell Legal Services. Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services? Business entity assumption

Business entity assumption

Which of the following is not included in the calculation of a company's ending equity

Cash

A balance sheet covers activities over a period of time such as a month or year

False

Investing Activities are the means an organization uses to pay resources like land, buildings, and equipment to carry out its plans

False

Return on assets often stated ratio form as the amount of average total assets divided by income

False

The first section of the income statement reports cash flows from operating activities

False

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have:

Increased $22,000

Net Income

Is the excess of expenses over revenues

An examples of investing activity is

Purchase of land

Technology

Reduces the time effort and cost of record keeping

A balance sheet lists:

The types and amounts of assets, liabilities and equity of a business as of a specific date

Assets are the resources a company owns or controls that are expected to yield future benefits

True

Net income is sometimes called earnings or profit

True

The conceptual framework for FASB and IASB are attempting to converge and enhance includes the following broad areas to guide standard setting except

Uniformity

Rent expense appears on which of the following statements?

income statement