ACC 241 Exam 1 Questions & Answers
100% Accurate!!
Which of the following is NOT a step in the accounting process?
a. Identification
b. Recording
c. Communication
d. Verification - ANSWERSd. Verification
Which of the following statements about users of accounting information is
INCORRECT?
a. Regulatory authorities are internal users.
b. Management is an internal user.
c. Taxing authorities are external users.
d. Present creditors are external users. - ANSWERSa. Regulatory authorities are
internal users.
The first step in solving an ethical dilemma is to
a. identify the alternatives.
b. recognize an ethical situation and the ethical issues involved.
c. weigh the impact of each alternative on various stakeholders.
d. identify and analyze the principal elements in the situation. - ANSWERSb. recognize
an ethical situation and the ethical issues involved.
Ethics are the standards of conduct by which one's actions are judged as
a. honest or dishonest.
b. right or wrong.
c. fair or unfair.
d. all of the answer choices are correct. - ANSWERSd. all of the answer choices are
correct.
The historical cost principle states that
a. activities of an entity are to be kept separate and distinct from its owner.
,b. only transaction data capable of being expressed in terms of money be included in
the accounting records.
c. assets should be initially recorded at cost and adjusted when the fair value changes.
d. assets should be recorded at their cost. - ANSWERSd. assets should be recorded at
their cost.
Generally Accepted Accounting Principles are
a. principles that have been proven correct by academic researchers.
b. income tax regulations of the Internal Revenue Service.
c. standards that indicate how to report economic events.
d. theories that are based on physical laws of the universe. - ANSWERSc. standards
that indicate how to report economic events.
A basic assumption of accounting assumes that requires that companies include in the
accounting records only transaction data that can be expressed in monetary terms is
referred to as the
a. fair value principle.
b. economic entity assumption.
c. monetary unit assumption.
d. historical cost principle. - ANSWERSc. monetary unit assumption.
At the beginning of the year, Kimball Company had total assets of $700,000 and total
liabilities of $400,000. If the total assets increased $100,000 and the total liabilities
decreased $80,000, what is the amount of owner's equity at the end of the year?
a. $300,000
b. $480,000
c. cannot be determined from the data given
d. $20,000 - ANSWERSb. $480,000
Milo has the following year-end account balances: Accounts Receivable, $5,000;
Supplies, $12,000; Equipment, $18,000; Accounts Payable, $17,000; Owner's Equity,
, $43,000. The Cash account balance was not available at year-end. Given the account
balances listed, the balance in the Cash account should be
a. $25,000.
b. cannot be determined from the data given.
c. $95,000.
d. $43,000. - ANSWERSa. $25,000.
Performing services on account will
a. increase assets and increase liabilities.
b. increase liabilities and increase owner's equity.
c. increase assets and decrease owner's equity.
d. increase assets and increase owner's equity. - ANSWERSd. increase assets and
increase owner's equity.
During the year, Gibson Company's assets decreased $50,000 and its liabilities
decreased $90,000. Its owner's equity therefore
a. decreased $40,000.
b. decreased $140,000.
c. increased $140,000.
d. increased $40,000. - ANSWERSd. increased $40,000.
A balance sheets shows
a. revenues and expenses at a certain point in time.
b. assets, liabilities, and owner's equity over a period of time.
c. assets, liabilities, and owner's equity at a certain point in time.
d. revenues and expenses over a period of time. - ANSWERSc. assets, liabilities, and
owner's equity at a certain point in time.
The ending owner's equity amount is shown on the
100% Accurate!!
Which of the following is NOT a step in the accounting process?
a. Identification
b. Recording
c. Communication
d. Verification - ANSWERSd. Verification
Which of the following statements about users of accounting information is
INCORRECT?
a. Regulatory authorities are internal users.
b. Management is an internal user.
c. Taxing authorities are external users.
d. Present creditors are external users. - ANSWERSa. Regulatory authorities are
internal users.
The first step in solving an ethical dilemma is to
a. identify the alternatives.
b. recognize an ethical situation and the ethical issues involved.
c. weigh the impact of each alternative on various stakeholders.
d. identify and analyze the principal elements in the situation. - ANSWERSb. recognize
an ethical situation and the ethical issues involved.
Ethics are the standards of conduct by which one's actions are judged as
a. honest or dishonest.
b. right or wrong.
c. fair or unfair.
d. all of the answer choices are correct. - ANSWERSd. all of the answer choices are
correct.
The historical cost principle states that
a. activities of an entity are to be kept separate and distinct from its owner.
,b. only transaction data capable of being expressed in terms of money be included in
the accounting records.
c. assets should be initially recorded at cost and adjusted when the fair value changes.
d. assets should be recorded at their cost. - ANSWERSd. assets should be recorded at
their cost.
Generally Accepted Accounting Principles are
a. principles that have been proven correct by academic researchers.
b. income tax regulations of the Internal Revenue Service.
c. standards that indicate how to report economic events.
d. theories that are based on physical laws of the universe. - ANSWERSc. standards
that indicate how to report economic events.
A basic assumption of accounting assumes that requires that companies include in the
accounting records only transaction data that can be expressed in monetary terms is
referred to as the
a. fair value principle.
b. economic entity assumption.
c. monetary unit assumption.
d. historical cost principle. - ANSWERSc. monetary unit assumption.
At the beginning of the year, Kimball Company had total assets of $700,000 and total
liabilities of $400,000. If the total assets increased $100,000 and the total liabilities
decreased $80,000, what is the amount of owner's equity at the end of the year?
a. $300,000
b. $480,000
c. cannot be determined from the data given
d. $20,000 - ANSWERSb. $480,000
Milo has the following year-end account balances: Accounts Receivable, $5,000;
Supplies, $12,000; Equipment, $18,000; Accounts Payable, $17,000; Owner's Equity,
, $43,000. The Cash account balance was not available at year-end. Given the account
balances listed, the balance in the Cash account should be
a. $25,000.
b. cannot be determined from the data given.
c. $95,000.
d. $43,000. - ANSWERSa. $25,000.
Performing services on account will
a. increase assets and increase liabilities.
b. increase liabilities and increase owner's equity.
c. increase assets and decrease owner's equity.
d. increase assets and increase owner's equity. - ANSWERSd. increase assets and
increase owner's equity.
During the year, Gibson Company's assets decreased $50,000 and its liabilities
decreased $90,000. Its owner's equity therefore
a. decreased $40,000.
b. decreased $140,000.
c. increased $140,000.
d. increased $40,000. - ANSWERSd. increased $40,000.
A balance sheets shows
a. revenues and expenses at a certain point in time.
b. assets, liabilities, and owner's equity over a period of time.
c. assets, liabilities, and owner's equity at a certain point in time.
d. revenues and expenses over a period of time. - ANSWERSc. assets, liabilities, and
owner's equity at a certain point in time.
The ending owner's equity amount is shown on the
