ACC 131 - CHAPTER 1 EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026
Accounting is an information and measurement system that: - Answers Identifies business activities,
Records business activities, Communicates business activities, and Helps people make better decisions
Internal users of accounting information include: - Answers Managers
Career opportunities in accounting include: - Answers Budgeting, Auditing, Cost accounting, and
Internal Auditing
A Certified Public Accountant - Answers Must meet education and experience requirements, Must
pass an examination, Must exhibit ethical character, and May also be a Certified Management
Accountant.
Ethics: - Answers Are beliefs that separate right from wrong, And law often coincide, Help to prevent
conflicts of interest, and Are critical in accounting
The private board that currently has the authority to establish generally accepted accounting
principles is the: - Answers FASB.
Generally accepted accounting principles: - Answers Are based on long used accounting practices, Are
basic assumptions, concepts, and guidelines for preparing financial statements, Are detailed rules
used in reporting on business transactions and events, and Arise from the rulings of authoritative
bodies.
The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of
assets associated with revenue to be in a form other than cash, and (3) measures the amount of
revenue as the cash plus the cash equivalent value of any noncash assets received from customers in
exchange for goods or services, is called the: - Answers Revenue recognition principle.
Revenue is properly recognized: - Answers Upon completion of the sale or when services have been
performed and the business obtains the right to collect the sales price.
Net Income: - Answers Is the excess of revenues over expenses.
If equity is $300,000 and liabilities are $192,000, then assets equal: - Answers $492,000.
Resources owned or controlled by a company that are expected to yield benefits are: - Answers
Assets.
Creditors' claims on the assets of a company are called: - Answers Liabilities.
Decreases in equity that represent costs of assets or services used to earn revenues are called: -
Answers Expenses.
The description of the relation between a company's assets, liabilities, and equity, which is expressed
as Assets = Liabilities + Equity, is known as the: - Answers Accounting equation.
Net income: - Answers Occurs when revenues exceed expenses.
Accounting - Answers Is an information and measurement system.
Identifies, records, and communicates information about business activities
Helps people make better decisions
Involves interpreting information and designing information systems to provide useful reports that
monitor and control a company's activities.
If assets are $99,000 and liabilities are $32,000, then equity equals: - Answers $ 67,000.
Which of the following statements is true about assets? - Answers They are economic resources
owned or controlled by the business.
They are expected to provide future benefits to the business.
They appear on the balance sheet.
Claims on them are shared between creditors and owners.
Distributions by a business to its owners are called: - Answers Withdrawals.
Accounting is an information and measurement system that: - Answers Identifies business activities,
Records business activities, Communicates business activities, and Helps people make better decisions
Internal users of accounting information include: - Answers Managers
Career opportunities in accounting include: - Answers Budgeting, Auditing, Cost accounting, and
Internal Auditing
A Certified Public Accountant - Answers Must meet education and experience requirements, Must
pass an examination, Must exhibit ethical character, and May also be a Certified Management
Accountant.
Ethics: - Answers Are beliefs that separate right from wrong, And law often coincide, Help to prevent
conflicts of interest, and Are critical in accounting
The private board that currently has the authority to establish generally accepted accounting
principles is the: - Answers FASB.
Generally accepted accounting principles: - Answers Are based on long used accounting practices, Are
basic assumptions, concepts, and guidelines for preparing financial statements, Are detailed rules
used in reporting on business transactions and events, and Arise from the rulings of authoritative
bodies.
The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of
assets associated with revenue to be in a form other than cash, and (3) measures the amount of
revenue as the cash plus the cash equivalent value of any noncash assets received from customers in
exchange for goods or services, is called the: - Answers Revenue recognition principle.
Revenue is properly recognized: - Answers Upon completion of the sale or when services have been
performed and the business obtains the right to collect the sales price.
Net Income: - Answers Is the excess of revenues over expenses.
If equity is $300,000 and liabilities are $192,000, then assets equal: - Answers $492,000.
Resources owned or controlled by a company that are expected to yield benefits are: - Answers
Assets.
Creditors' claims on the assets of a company are called: - Answers Liabilities.
Decreases in equity that represent costs of assets or services used to earn revenues are called: -
Answers Expenses.
The description of the relation between a company's assets, liabilities, and equity, which is expressed
as Assets = Liabilities + Equity, is known as the: - Answers Accounting equation.
Net income: - Answers Occurs when revenues exceed expenses.
Accounting - Answers Is an information and measurement system.
Identifies, records, and communicates information about business activities
Helps people make better decisions
Involves interpreting information and designing information systems to provide useful reports that
monitor and control a company's activities.
If assets are $99,000 and liabilities are $32,000, then equity equals: - Answers $ 67,000.
Which of the following statements is true about assets? - Answers They are economic resources
owned or controlled by the business.
They are expected to provide future benefits to the business.
They appear on the balance sheet.
Claims on them are shared between creditors and owners.
Distributions by a business to its owners are called: - Answers Withdrawals.
