Question 1

Which of the following is an external user of accounting information?

Accepted Answer

A)   Labor unions.
B)   Finance directors.
C)   Company officers.
D)   Managers.E) A) and B)
F) None of the above

Question 2

Preparing tax returns and engaging in tax planning is performed by

Accepted Answer

A)   public accountants only.
B)   private accountants only.
C)   both public and private accountants.
D)   IRS accountants only.E) A) and B)
F) B) and D)

Question 3

A payment on account decreases

Accepted Answer

A)   assets and equity.
B)   liabilities and equity.
C)   assets and liabilities.
D)   assets, liabilities and equity.E) B) and D)
F) All of the above

Question 4

IFRS is considered to be more

Accepted Answer

A)   detailed than GAAP.
B)   rules-based and less principles-based than GAAP.
C)   principles-based and less rules-based than GAAP.
D)   None of these answer choices are correct.E) All of the above
F) B) and C)

Question 5

Which of the following would not be considered an external user of accounting data for the GHI Company?

Accepted Answer

A)   Taxing authority representative.
B)   Management.
C)   Creditors.
D)   Customers.E) B) and C)
F) A) and D)

Question 6

Foreign companies whose shares are traded on U.S. stock markets must use GAAP.

Accepted Answer

A) True 
 B)False

Question 7

The net income reported by Carla's Computer Repair Shop for the year was

Accepted Answer

A)   $300,000.
B)   $390,000.
C)   $180,000.
D)   $810,000.E) All of the above
F) None of the above

Question 8

Mica Inc. began operations in October, 2014. During October, Mica sold ordinary shares for €600,000, earned revenue of €66,000, incurred expenses of €36,000, and paid dividends of €3,000. Equity at the end of the month is

Accepted Answer

A)   €27,000.
B)   €30,000.
C)   €627,000.
D)   €630,000.E) A) and B)
F) B) and D)

Question 9

Internal users of accounting information include

Accepted Answer

A)   the shareholders of Royal Dutch Shell.
B)   the State Administration of Taxation of China.
C)   the Chief Financial officer of Credit Suisse.
D)   the International Accounting Standards Board.E) C) and D)
F) B) and D)

Question 10

The Sarbanes-Oxley Act determines

Accepted Answer

A)   U.S tax regulations.
B)   internal control standards of U.S. publicly traded companies.
C)   internal control standards as enforced by the IASB.
D)   international tax regulations.E) B) and C)
F) A) and C)

Question 11

The study of accounting is not useful for a business career unless your career objective is to become an accountant.

Accepted Answer

A) True 
 B)False

Question 12

The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments of a company during a period.

Accepted Answer

A) True 
 B)False

Question 13

The statement of financial position at December 31, 2014 reports total assets of

Accepted Answer

A)   €320,000.
B)   €404,000.
C)   €456,000.
D)   €486,000.E) B) and C)
F) A) and D)

Question 14

Equity is often referred to as

Accepted Answer

A)   residual equity.
B)   leftovers.
C)   spoils.
D)   second equity.E) A) and B)
F) A) and C)

Question 15

On its December 31, 2014 statement of financial position, Adaro Corporation reported liabilities of Rp5,132,000,000, share capital of Rp2,662,000,000 and retained earnings of Rp4,202,000,000. Total assets as of December 31, 2014 are

Accepted Answer

A)   Rp1,732,000,000.
B)   Rp4,202,000,000.
C)   Rp6,864,000,000.
D)   Rp11,996,000,000.E) B) and C)
F) A) and B)

Question 16

A business organized as a corporation

Accepted Answer

A)   is not a separate legal entity in most countries.
B)   requires that shareholders be personally liable for the debts of the business.
C)   is owned by its shareholders.
D)   terminates when one of its original shareholders dies.E) B) and C)
F) A) and D)

Question 17

The accounting equation for Gudgeyes Enterprises is as follows: Assets Liabilities Equity
$140,000 = $60,000 + $80,000
If Gudgeyes purchases office equipment on account for $12,000, the accounting equation will change to
Assets Liabilities Equity

Accepted Answer

A)   $140,000 = $60,000 + $80,000
B)   $152,000 = $60,000 + $92,000
C)   $152,000 = $76,000 + $76,000
D)   $152,000 = $72,000 + $80,000E) None of the above
F) A) and D)

Question 18

At October 1, Smithson Enterprises reported equity of $210,000. During October, capital shares of $12,000 were issued and the company earned net income of $36,000. If equity at October 31 totals $240,000, what amount of dividends were paid during the month?

Accepted Answer

A)   $0
B)   $18,000
C)   $24,000
D)   $30,000E) C) and D)
F) All of the above

Question 19

Classify each of these items as an asset (A), liability (L), or equity (E)
. Accounts receivable
_____2. Accounts payable
_____ 3. Share capital-ordinary
______4. Supplies
_____ 5. Utiities expense
______6. Cash
_____ 7. Nate payable
______8. Equipment

Accepted Answer

1. A
2. L...

Question 20

Accountants record both internal and external transactions.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting in Action

Which of the following is an external user of accounting information?

Correct AnswerverifiedShow Answer

Mica Inc. began operations in October, 2014. During October, Mica sold ordinary shares for €600,000, earned revenue of €66,000, incurred expenses of €36,000, and paid dividends of €3,000. Equity at the end of the month is

Correct AnswerverifiedShow Answer

At October 1, Smithson Enterprises reported equity of $210,000. During October, capital shares of $12,000 were issued and the company earned net income of $36,000. If equity at October 31 totals $240,000, what amount of dividends were paid during the month?

Correct AnswerverifiedShow Answer

A business organized as a corporation

Correct AnswerverifiedShow Answer

Foreign companies whose shares are traded on U.S. stock markets must use GAAP.

Correct AnswerverifiedShow Answer

The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments of a company during a period.

Correct AnswerverifiedShow Answer

Internal users of accounting information include

Correct AnswerverifiedShow Answer

A payment on account decreases

Correct AnswerverifiedShow Answer

Classify each of these items as an asset (A), liability (L), or equity (E) _____1. Accounts receivable _____2. Accounts payable _____ 3. Share capital-ordinary ______4. Supplies _____ 5. Utiities expense ______6. Cash _____ 7. Nate payable ______8. Equipment

Correct Answerverified1. A 2. L...View AnswerShow Answer

Equity is often referred to as

Correct AnswerverifiedShow Answer

Which of the following would not be considered an external user of accounting data for the GHI Company?

Correct AnswerverifiedShow Answer

Preparing tax returns and engaging in tax planning is performed by

Correct AnswerverifiedShow Answer

The accounting equation for Gudgeyes Enterprises is as follows: Assets Liabilities Equity $140,000 = $60,000 + $80,000 If Gudgeyes purchases office equipment on account for $12,000, the accounting equation will change to Assets Liabilities Equity

Correct AnswerverifiedShow Answer

The net income reported by Carla's Computer Repair Shop for the year was

Correct AnswerverifiedShow Answer

The statement of financial position at December 31, 2014 reports total assets of

Correct AnswerverifiedShow Answer

The study of accounting is not useful for a business career unless your career objective is to become an accountant.

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act determines

Correct AnswerverifiedShow Answer

On its December 31, 2014 statement of financial position, Adaro Corporation reported liabilities of Rp5,132,000,000, share capital of Rp2,662,000,000 and retained earnings of Rp4,202,000,000. Total assets as of December 31, 2014 are

Correct AnswerverifiedShow Answer

IFRS is considered to be more

Correct AnswerverifiedShow Answer

Accountants record both internal and external transactions.

Correct AnswerverifiedShow Answer

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Classify each of these items as an asset (A), liability (L), or equity (E) ___1. Accounts receivable _2. Accounts payable _ 3. Share capital-ordinary __4. Supplies _ 5. Utiities expense __6. Cash _ 7. Nate payable ____8. Equipment

Correct Answer
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1. A
2. L...
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