MGMT 200 EXAM # 1 (question and answers 100% sure

What is the process of identifying, measuring, and communication economic information to various users? - Accounting What makes accounting a valuable discipline? - Provides information to make decisions The branch of accounting concerned with providing management with information to facilitate planning and control is? - Managerial accounting The main objective of financial reporting is to provide information: - Decision making The area of accounting that emphasizes developing accounting information to use within a company is: - Managerial accounting A transaction is any event, external or internal, that is recognized in a set of financial statements - True Transactions must affect the financial position of the business to be recorded in a financial accounting system. - True Which of the following is a business event that is not considered a recordable transaction? A. A customer places an order for product B. A company receives a product previously ordered C. A company pays an employee for work performed D. A customer purchases a service - A customer places an order for a product Which of the following business event is not a recordable transaction in accounting? A. Paying wages B. Receiving goods C. Signing a contract D. Purchasing a service - Signing a contract Which is recorded first? A. When a company signs the agreement B. When a company receives delivery of the truck C. When a company receives the bill from the seller D. When a company pays 60000 to the seller - When a company receives delivery of a truck Assets can be best described as - Resources owned by the company having future benefit to the company Those who lend money or deliver goods and services before being paid are called - Creditors (like suppliers, bank, employees) What is not an asset? *Assets benefit future operations. Examples are cash, inventory, supplies, accounts receivable, buildings and equipment. - Common stock What is the best definition of an accounts receivable? - Amounts owed by customers to a company A supplier that deliver goods and services before being paid is typically recorded in an liability account called - Accounts payable The amounts recorded when the company sells products or provides services to customers are referred to as: - Revenues The costs associated with producing revenues are referred to as: - Expenses Dividends represent a return of the company's profit to stockholders - True In a corporation, the authority to pay a dividend is determined by the - Board of directors The measurement/communication process of financial accounting is referred to as the - Accounting cycle Which of the following is NOT possible when recording a transaction? A. One asset increases and another asset decreases B. Stockholders' equity increases and assets increase C. Stockholder's equity D. Assets decrease and stockholders' equity increase - Assets decrease and stockholders' equity increase The effects of purchasing inventories on credit(or on account) are to: - Increase assets and increase liabilities When a cash payment is made on wages payable: - Assets and liabilities decrease The effects of paying salaries for the current period are to: - Decrease assets and decrease stockholders' equity Which of the following transactions would cause an increase in liabilities and a decrease in retained earnings? A.Paying insurance premium for the next two years B. Received a maintenance bill to be paid the following month C. Paying advertising for the current month D. Providing installation services to customers - Received a maintenance bill to be paid the following month The purchase of a $5000 liability insurance policy for the next year on account will: A. Increase both expense and liabilities by $5000 B. Increase assets and decrease stockholders equity by $5000 C. Increase both assets and liabilities by $5000 D. Increase both assets and stockholders' equity - Increase both assets and liabilities by $5000 Assume that a company performed landscaping services of 1250 on account for an office complex. How would this transaction affect the company? - Increase equity and increase assets by 1250 Which of the following is true? - The credit is on the right side of an asset account What is false? - The right side of a T-account is called the debit side For a T account, an account balance is the difference in total dollars between total debt footings and total credit footings - True Debits will: - Increase assets, expenses, and dividends What is true? i. Debits represent decreases and credits represent increases ii. Credits must always equal debits iii. Liabilities and stockholders' equity have normal credit balances while assets have normal debit balances - II and III Which of the following is correct? - Inventories are decrease with a credit Consider the list of accounts Revenues Prepaid rent Equipment Utilities expense Salaries liabilities Cash Accounts payable Common stock Rent payable Dividends - Five: Equipment, Prepaid rent, utilities expense, cash, dividends Which of the following transaction would cause a decrease in both assets and stockholders' equity? - Paying utilities for the current month Which of the following is not a possible journal entry? - Debit assets; debit stockholders' equity