ACCT ASP Ch. 1 100% SOLUTION

ACCT ASP Ch. 1 100% SOLUTION Which of the following users is not considered an internal user of accounting information? A. An employee B. A small business owner C. A manager D. A supplier - ANSWER D Which of the following users is not considered an external user of accounting information? A. The government B. A creditor C. An investor D. A manager - ANSWER D Which of the following is not accurate when it pertains to managerial accounting? A. Uses both financial accounting information and estimates in helping managers make daily decisions B. Provides economic data reports on the operations and condition of the business that are useful for banks and other creditors in deciding whether to lend money to the business C. Uses past information to estimate the planning of future operations D. Gathers and reports information that is relevant to the decision-making needs of management - ANSWER B Which of the following forms of business entities generates 90% of business revenues in the United States? A. Corporations B. Partnerships C. Manufacturing companies D. Proprietorships - ANSWER A The principles and assumptions that the management of a company uses to record and report its financial information are called A. AICPA. B. GAAP. C. SEC. D. FASB. - ANSWER B The business entity assumption is important because A. it requires that the company record all of its economic transactions in accordance with GAAP. B. it requires that all transactions be recorded in the period in which they occur. C. it limits economic data in the accounting system to data directly related to the activities of the business. D. it limits the amount that a company can record for its transactions in the accounting records. - ANSWER C Accounting principles within the United States are primarily developed by the A. FASB. B. SEC. C. IASB. D. GAAP. - ANSWER A Emily owns three businesses: a dry cleaner, a market, and a candy store. The dry cleaner has revenue of $5,000; the market has revenue of $10,000; and the candy store has revenue of $7,000. Under the business entity assumption, Emily should record A. $22,000 of revenue in the records of the market. B. $22,000 of revenue in the records of the dry cleaner. C. $22,000 of revenue in her personal records. D. None of these choices are correct. - ANSWER D Equipment with a sales price of $100,000 is purchased at a discount of 10% by Aaron Company. At what value should the equipment be recorded in Aaron Company's records? A. $10,000 B. $100,000 C. $90,000 D. None of these choices are correct. - ANSWER C Which of the following does not represent the accounting equation? A. Assets − Stockholders' Equity = Liabilities B. Assets − Liabilities = Stockholders' Equity C. Assets + Stockholders' Equity = Liabilities D. Assets = Liabilities + Stockholders' Equity - ANSWER C Liabilities are A. the rights of customers. B. the rights of creditors. C. the rights of owners. D. None of these choices are correct. - ANSWER B Which of the following best represents the accounting equation? A. Assets + Liabilities = Stockholders' Equity B. Assets = Liabilities - Stockholders' Equity C. Assets + Stockholders' Equity = Liabilities D. Assets = Liabilities + Stockholders' Equity - ANSWER D Assets and liabilities of a company are $150,000 and $30,000, respectively. Determine stockholders' equity using the accounting equation. A. $150,000 B. $180,000 C. $30,000 D. $120,000 - ANSWER D Assets and stockholders' equity of a company are $150,000 and $75,000, respectively. Determine liabilities using the accounting equation. A. $75,000 B. $150,000 C. $25,000 D. $225,000 - ANSWER A Liabilities and stockholders' equity of a company are $50,000 and $150,000, respectively. Determine assets using the accounting equation. A. $100,000 B. $150,000 C. $50,000 D. $200,000 - ANSWER D