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Exam 1: Accounting in Business

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Question 41

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Technology:

A) Has replaced accounting.
B) Has not changed the work that accountants do.
C) Has closely linked accounting with consulting, planning, and other financial services.
D) In accounting has replaced the need for decision makers.
E) In accounting is only available to large corporations.

F) A) and B)
G) A) and D)

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Question 42

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Net income occurs when revenues exceed expenses.

A) True
B) False

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Question 43

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The three common forms of business ownership include sole proprietorship,partnership,and non-profit.

______________ activities involve using resources to research,develop,purchase,produce,distribute,and market products and services.

A company's balance sheet shows: cash $24,000,accounts receivable $30,000,equipment $50,000,and equity $72,000.What is the amount of liabilities?

Reston had income of $150 million and average invested assets of $1,800 million.Its return on assets is:

Assets created by selling goods and services on credit are:

The three major types of business activities are operating,financing,and investing.

Objectivity means that financial information is supported by independent unbiased evidence.

Risk is the uncertainty about the return we expect to earn.

The accounting concept that requires financial statement information to be supported by independent,unbiased evidence other than someone's belief or opinion is:

All of the following are true regarding ethics except:

Assets removed from the business by the business owner for personal use are called ____________.

How does the objectivity principle support ethical behavior?

An income statement reports on investing and financing activities.

Zion Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.What would be the effects of this transaction on the accounting equation?

Harris Co.has a net income of $43,000,assets at the beginning of the year are $250,000 and assets at the end of the year are $300,000.Compute its return on assets.

The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

The statement of cash flows identifies cash flows separated into operating,investing,and financing activities over a period of time.

Understanding generally accepted accounting principles is not necessary to use and interpret financial statements.