Chapter 1 Accounting

14 Questions | Attempts: 132
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  • 1/14 Questions

    During the year, ChemClean, Inc., has $140000 in revenues, $75,000 in expenses, and $3,000 in dividend payments. Stockholders' equity changed by 

    • + 62,000
    • +68,000
    • -62,000
    • -68,000
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  • 2. 

    Which items are reported on the balance sheet?

    • Accounts payable

    • Inventory

    • Retained Earnings

    • All of the above

    Correct Answer
    A. All of the above
  • 3. 

    All of the following statements are true except one. Which statement is false?

    • Bookeeping is only a part of accounting

    • A proprietorship is a business with several owners

    • Professional accountants are held to high standard of ethical conduct

    • The organization that formulates GAAP is the Financial Accounting Standards Board

    Correct Answer
    A. A proprietorship is a business with several owners
  • 4. 

    Which of the following is the most accurate statement regarding ethics as applied to decision making in accounting?

    • Ethics has no place in accounting, since accounting deals purely with numbers

    • It is impossible to learn ethical decision making since it is just something you decide to do or not to do

    • Ethics involves making difficult choices under pressure and should be kept in mind making every decision, including those involving accounting

    • Ethics is becoming less important as a field of study in business

    Correct Answer
    A. Ethics involves making difficult choices under pressure and should be kept in mind making every decision, including those involving accounting
  • 5. 

    The valuation of assets on the balance sheet is generally based on

    • Current fair market value as established by independent appraisers

    • What it would cost to replace the asset

    • Historical cost

    • Selling price

    Correct Answer
    A. Historical cost
  • 6. 

    The accounting equation can be expressed as

    • Assets + Liabilities= OE

    • OE-A=L

    • A-L=OE

    • A=L-OE

    Correct Answer
    A. A-L=OE
  • 7. 

    Which financial statement covers a period of time?

    • Balance sheet

    • Income statement

    • Statement of cash flows

    • Both B and C

    Correct Answer
    A. Both B and C
  • 8. 

    Which of the following is a true statement about International Financial Reporting Standards?

    • They are converging gradually with US standards

    • THey are not needed for US business since the US already has the strongest accounting standards in the world.

    • They are more exact than GAAP

    • They are not being applied anywhere in the world yet, but soon they will be.

    Correct Answer
    A. They are converging gradually with US standards
  • 9. 

    Valor Corp. holds cash of $5,000 and owes $29,000 on accounts payable. Valor has accounts receivable of $40,000, inventory of $36,000 and land that costs $50000. How much are Valor's total assets and liabilities?

    • A= 126000 L= 29000

    • A= 29000 L= 131000

    • A= 131000 L= 29000

    • A= 131000 L= 84000

    Correct Answer
    A. A= 131000 L= 29000
  • 10. 

    Hall Company had total assets of $360,000 and total stockholder's equity of $120,000 at the beginning of the year. During the year, assets increased by $60,000 and liabilities increased $35,000. Stockholders' equity at the end of the year was

    • 95000

    • 150000

    • 145000

    • 155000

    Correct Answer
    A. 145000
  • 11. 

    During the year, Diaz OE increased from $46,000 to $62,000. Diaz earned NI of $20,000. How much in dividends did Diaz declare during the year?

    • 16,000

    • 5,000

    • 4,000

    • 0

    Correct Answer
    A. 4,000
  • 12. 

    HOw would net income be most likely to affect accounting equation?

    • Increase liabilities and decrease OE

    • Increase A Increase L

    • Decrease A Decrease L

    • Increase A Increase OE

    Correct Answer
    A. Increase A Increase OE
  • 13. 

    The nature of an asset is best described as

    • Something owned by a business that has a ready market value

    • Something with physical form that's valued at cost in the accounting records

    • An economic resource representing cash or the right to receive cash for the future

    • An economic resource that's expected to benefit future operations

    Correct Answer
    A. An economic resource that's expected to benefit future operations
  • 14. 

    ChemClean inc. in question 7 had 

    • NI of 62,000

    • NI of 140,000

    • Net loss of 75,000

    • Net loss of 65,000

    Correct Answer
    A. Net loss of 65,000

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  • Current Version
  • Mar 21, 2022
    Quiz Edited by
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  • Dec 13, 2012
    Quiz Created by
    Lnwilcox
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