Chapter 1 Accounting

14 Questions | By Lnwilcox | Updated: Mar 21, 2022 | Attempts: 132

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1.

All of the following statements are true except one. Which statement is false?
- A.
  
  Bookeeping is only a part of accounting
- B.
  
  A proprietorship is a business with several owners
- C.
  
  Professional accountants are held to high standard of ethical conduct
- D.
  
  The organization that formulates GAAP is the Financial Accounting Standards Board
Correct Answer
B. A proprietorship is a business with several owners
2.

The valuation of assets on the balance sheet is generally based on
- A.
  
  Current fair market value as established by independent appraisers
- B.
  
  What it would cost to replace the asset
- C.
  
  Historical cost
- D.
  
  Selling price
Correct Answer
C. Historical cost
3.

The accounting equation can be expressed as
- A.
  
  Assets + Liabilities= OE
- B.
  
  OE-A=L
- C.
  
  A-L=OE
- D.
  
  A=L-OE
Correct Answer
C. A-L=OE
4.

The nature of an asset is best described as
- A.
  
  Something owned by a business that has a ready market value
- B.
  
  Something with physical form that's valued at cost in the accounting records
- C.
  
  An economic resource representing cash or the right to receive cash for the future
- D.
  
  An economic resource that's expected to benefit future operations
Correct Answer
D. An economic resource that's expected to benefit future operations
5.

Which financial statement covers a period of time?
- A.
  
  Balance sheet
- B.
  
  Income statement
- C.
  
  Statement of cash flows
- D.
  
  Both B and C
Correct Answer
D. Both B and C
6.

HOw would net income be most likely to affect accounting equation?
- A.
  
  Increase liabilities and decrease OE
- B.
  
  Increase A Increase L
- C.
  
  Decrease A Decrease L
- D.
  
  Increase A Increase OE
Correct Answer
D. Increase A Increase OE
7.

During the year, ChemClean, Inc., has $140000 in revenues, $75,000 in expenses, and $3,000 in dividend payments. Stockholders' equity changed by
- A.
  
  + 62,000
- B.
  
  +68,000
- C.
  
  -62,000
- D.
  
  -68,000
Correct Answer
A. + 62,000
8.

ChemClean inc. in question 7 had
- A.
  
  NI of 62,000
- B.
  
  NI of 140,000
- C.
  
  Net loss of 75,000
- D.
  
  Net loss of 65,000
Correct Answer
D. Net loss of 65,000
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.
  
  A= 126000 L= 29000
- B.
  
  A= 29000 L= 131000
- C.
  
  A= 131000 L= 29000
- D.
  
  A= 131000 L= 84000
Correct Answer
C. A= 131000 L= 29000
10.

Which items are reported on the balance sheet?
- A.
  
  Accounts payable
- B.
  
  Inventory
- C.
  
  Retained Earnings
- D.
  
  All of the above
Correct Answer
D. All of the above
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?
- A.
  
  16,000
- B.
  
  5,000
- C.
  
  4,000
- D.
  
  0
Correct Answer
C. 4,000
12.

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
- A.
  
  95000
- B.
  
  150000
- C.
  
  145000
- D.
  
  155000
Correct Answer
C. 145000
13.

Which of the following is a true statement about International Financial Reporting Standards?
- A.
  
  They are converging gradually with US standards
- B.
  
  THey are not needed for US business since the US already has the strongest accounting standards in the world.
- C.
  
  They are more exact than GAAP
- D.
  
  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
14.

Which of the following is the most accurate statement regarding ethics as applied to decision making in accounting?
- A.
  
  Ethics has no place in accounting, since accounting deals purely with numbers
- B.
  
  It is impossible to learn ethical decision making since it is just something you decide to do or not to do
- C.
  
  Ethics involves making difficult choices under pressure and should be kept in mind making every decision, including those involving accounting
- D.
  
  Ethics is becoming less important as a field of study in business
Correct Answer
C. Ethics involves making difficult choices under pressure and should be kept in mind making every decision, including those involving accounting

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Current Version
Mar 21, 2022

Quiz Edited by
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Dec 13, 2012

Quiz Created by
Lnwilcox

Chapter 1 Accounting

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

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

The accounting equation can be expressed as

The nature of an asset is best described as

Which financial statement covers a period of time?

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

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

ChemClean inc. in question 7 had

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?

Which items are reported on the balance sheet?

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?

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

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

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