MGMT 200 Exam 1 - Purdue University / MGMT 200 (Purdue) Exam 1| 150 QUESTIONS| WITH COMPLETE SOLUTION

MGMT 200 Exam 1 - Purdue University / MGMT 200 (Purdue) Exam 1| 150 QUESTIONS| WITH COMPLETE SOLUTION Preparing a budget for a business is considered A. financial accounting. B. managerial accounting. - correct ans-B. managerial accounting. (Management accounting provides information to people within an organization while financial accounting is mainly for those outside it, such as shareholders.) Accounting is the information system that A. measures business activities B. communicates the results to decision makers C. processes information into reports D. all of the above. - correct ans-D. all of the above. Which of the following is not an external user of a business's financial information? A. Taxing authorities B. Customers C. Employees D. Investors - correct ans-C. Employees Which statement below best describes the accounting equation? A. The change in retained earnings equals net income less dividends. B. Equality of revenue and expense transactions over time. C. Financing activities equal investing and operating activities. D. Resources of the company equal creditors' and owners' claims to those resources. - correct ans-D. Resources of the company equal creditors' and owners' claims to those resources. (assets = liabilities + stockholders' equity) Owners' claims to the company's resources are referred to as: A. Liabilities. B. Assets. C. Stockholders' equity. D. Net liabilities. - correct ans-C. Stockholders' equity. (assets = liabilities + stockholders' equity) If total assets of a company equal $25,000 and total stockholders' equity equals $10,000, then total liabilities equal $15,000. A. True B. False - correct ans-A. True (Assets = Liabilities + Equity $25,000 = $15,000 + $10,000) Amounts owed to suppliers for supplies