test 20 questions this is a timed test and it needs to be done in 30 mins!!!!
By definition, which type of organization has stockholders?
Partnerships Sole Proprietorships Merchandisers Corporations
The concept that dictates accountants to assume the business will continue to operate into the future is:
Going Concern Materiality Historical Cost Conservatism
The Maximum Experience Company acquired a building for $500,000. Maximum Experience had an appraisal done and found that the building was worth $575,000. The seller had paid $300,000 for the building six years ago. Which accounting principle would prescribe that Maximum Experience record the building on its records at $500,000?
Revenue recognition principle Business entity principle Cost principle Going-concern principle
On December 15, 2013, Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2014. Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2014 and not 2013?
Monetary unit principle Cost principle Revenue recognition principle Going-concern principle
Marian Mosely is the owner of Mosely Accounting Services. Which accounting assumption requires Marian to keep her personal financial information separate from the financial information of Mosely Accounting Services?
Cost assumption Business entity assumption Going-concern assumption Full disclosure assumption
The primary objective of financial accounting is to:
Provide financial statements to help external users analyze and interpret an organization’s activities. Monitor and control company activities. Provide information on both the costs and benefits of managing products and services. Serve the decision-making needs of internal users.
Generally accepted accounting Principles:
Intend to make information on the financial statements relevant, reliable, and comparable. Oversees Security and Exchange Commission Focus on the review of a situation. Never change.
Which of the following is
a part of SOX?
Public Company Accounting Oversight Board Includes standards for all United States boards, management, and accounting firms Auditor independence Corporate senior executives take responsibility for accuracy and completeness
All of the following are advantages of the corporate form of business
Limited liability of owners Ease of raising capital Flow through taxation of owners Double taxation of dividends
The Income Statement shows:
Assets, liabilities, and equity of a company The results of operations over a period of time Financial position of an organization at a point in time a reconciliation of the beginning and ending balance of the statement of retained earnings
The accounting equation is best stated as:
Assets=Liabilities+Equity Equity=Liabilities-assets Liabilities=Assets+Equity Assets=Liabilites-equity
Hunting & Fishing Corporation has revenues of $100,000, expenses of $80,000, and dividends of $12,000 for the year. What is their net income?
$20,000 $92,000 $112,000 $88,000
Revenues, expenses and dividends are all a part of:
Liabilities The Income Statement Assets Retained Earnings
Miranda opens her business by investing $12,000. How does this affect the accounting equation?
Increase Cash and decrease Equity Increase Cash and Increase Equity Decrease Cash and Increase Equity Increase Equity and Decrease Liabilities
A net income or loss is originally shown on the:
Balance Sheet Income statement Statement of Retained Earnings Cash Flow Statement
Which of the following statements illustrates the accounting equation?
Balance Sheet Cash Flow Statement Income statement Statement of Retained Earnings
If equity is $300,000 and liabilities are $192,000, then assets equal:
$492,000 $108,000 $192,000 $300,000
Accounts payable appear on which of the following statements?
Statement of cash flows Statement of retained earnings Balance sheet Income statement
How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?
+$10,000 accounts receivable, +$10,000 cash. +$10,000 accounts receivable, +$10,000 revenue. +$10,000 accounts receivable, -$10,000 accounts payable. +$10,000 accounts receivable, +$10,000 accounts payable.
The financial statement that describes where a company’s cash came from and how it was spent during the period is the:
Statement of cash flows. Income statement. Balance sheet. Statement of financial position.