Chap 1: Accounting in action
As of June 30, 2016, Little Giantz Company has assets of $100,000 and 1 .
owner’s equity of $60,000. What are the liabilities for Little Giantz Company as of June 30, 2016 ? a.$40,000 b.$160,000 c.$60,000 d.$100,000
If total liabilities decreased by $30,000 and owner’s equity decreased 2 .
by $15,000 during a period of time, then total assets must change by what amount and directi ? on during that same period a.$15,000 decrease b.$15,000 increase c.$45,000 increase d.$45,000 decrease
Juggernaut Company buys a $29,000 van on credit. The transaction will 3 . affect the a.income statem .
ent, owner's equity statement, and balance sheet b.income stateme . nt only c.balance sheet only . d.income stateme .
nt and owner's equity statement only
A net loss will result during a time period when 4 . a.expenses exceed revenues . b.assets exceed owner's equi . ty c.revenues exceed expenses . d.assets exceed lia . bilities
If total liabilities increased by $6,000, then 5 . a.assets and owner's equit . y each increased by $3,000
b.owner's equity must have incr . eased by $6,000
c.assets must have increased by $6,000, or owner's equity must have decreased by $6,000 .
d.assets must have decreased by $6,000 .
All of the financial statements are for a period of time except the 6 . a.owner's equity state . ment b.statement of cash flows . c.income statem . ent d.balance sheet .
The starting point of the accounting process is 7 . a.communicating infor . mation to users b.identifying economic events . c.recording economic events .
d.None of these answers are corr . ect
Which one of the following is not an external user of accounting 8 . information ? a.Customers .
b.All of these answers choices are ext . ernal users c.Investors . d.Regulatory agencies .
El Centro Company began the year with owner’s equity of $30,000. 9 .
During the year, El Centro received additional owner investments of
$42,000, recorded expenses of $120,000, and had owner drawings of
$12,000. If El Centro’s ending owner’s equity was $112,000, what was the
company’s revenue for the year ? a.$172,000 . b. $202,000 . c. $164,000 . d. $214,000 .
The conceptual framework that underlies IFRS 10 .
a.does not define assets or lia . bilities
b.does not define income or expenses .
c.is very similar to that used to de . velop GAAP d.does not define equity .
Collection of a $1,500 Accounts Receivable 11 .
a.increases an asset $1,500; decre . ases a liability $1,500 b.decreases a liabi .
lity $1,500; increases owner's equity $1,500
c.increases an asset $1,500; decre . ases an asset $1,500
d.decreases an asset $1,500; decr . eases a liability $1,500
Teamboo Company’s owner’s equity at the beginning of August 2016 12 .
was $740,000. During the month, the company earned net income of
$175,000 and owner’s drawings were $80,000. At the end of August 2016,
what is the balance in owner’s equity ? a.$660,000 b.$740,000 c.$835,000 d.$820,000
Foxes Service Shop started the year with total assets of $320,000 and 13 .
total liabilities of $240,000. During the year, the business recorded
$630,000 in revenues, $450,000 in expenses, and owner drawings of
$60,000. The net income reported by Foxes Service Shop for the year was a.$180,000 . b.$270,000 . c.$140,000 . d.$200,000 .
Interpretation of reported information involves each of the following 14 . except a.limitations of reported data . b.meaning of reported data .
c.All of these choices are correc . t d.uses of reported data .
Alicia Keyes Company began the year with owner’s equity of 15 .
$280,000. During the year, the company recorded revenues of $375,000,
expenses of $265,000, and had owner drawings of $30,000. What was Alicia Keyes’ ?
owner’s equity at the end of the year a.$390,000 . b.$420,000 . c.$280,000 . d.$360,000 .
Generally accepted accounting principles are 16 . a.standards that indica .
te how to report economic events
b.principles that have been proven corr . ect by academic researchers
c.income tax regulations of the Int . ernal Revenue Service
d.theories that are based on physica . l laws of the universe
The ending owner's equity amount is shown on 17 . a.the owner's equity stat . ement only
b.both the balance sheet and the owner . 's equity statement c.both the income statem .
ent and the owner's equity statement d.the balance sheet only .
Ethics are the standards of conduct by which one's actions are judged 18 . as a.honest or dishonest . b.fair or unfair . c.right or wrong .
d.All of these answer choices ar . e correct
Which of the following would not be considered an internal user of 19 . accounting data ? a.Merchandise inventor . y clerk b.President of the employees . ' labor union c.President of the company . d.Production manager .
As of December 31, 2016, Cancon Company has assets of $42,000 20 .
and owner's equity of $22,000. What are the liabilities for Cancon
Company as of December 31, 2016 ? a.$22,000 . b.$20,000 . c.$42,000 . d.$64,000 .
At October 1, Flambo Company reported owner’s equity of $68,000. 21 .
During October, the owner made additional investments of $10,000 and
the company posted a net loss of $4,000. If owner’s equity at October 31
totals $70,000, what amount of owner drawings were made during the month ? a.$0 b.$10,000 c.$4,000 d.$6,000
Eli’s Electronic Repair Shop started the year with total assets of 22 .
$300,000 and total liabilities of $200,000. During the year, the business
recorded $400,000 in electronic repair revenues, $300,000 in expenses,
and Eli withdrew $50,000. The net income reported by Eli's Electronic Repair Shop for the year was a.$100,000 . b.$250,000 . c.$150,000 . d.$300,000 .
The balance sheet is frequently referred to as 23 . a.the statement of financi . al position
b.the statement of owner's equity . c.an operating stat . ement d.the statement of cash flows .
The historical cost principle requires that when assets are acquired, 24 . they be recorded at a.book value . b.cost . c.market price . d.appraisal value .
If total liabilities increased by $9,000 during a period of time and 25 .
owner’s equity decreased by $25,000 during the same period, then the
amount and direction (increase or decrease) of the period’s change in total assets is a(n ( a.$34,000 increase . .b.$16,000 decrease c.$16,000 increase . .d.$34,000 decrease
Foxes Service Shop started the year with total assets of $320,000 and 26 .
total liabilities of $240,000. During the year, the business recorded
$630,000 in revenues, $450,000 in expenses, and owner drawings of
$60,000. Owner’s equity at the end of the year was a.$80,000 . b.$310,000 . c.$200,000 . d.$370,000 .
Financial accounting provides economic and financial information for 27 . all of the following except a.managers . b.creditors . c.investors . d.other external users .
Communication of economic events is the part of the accounting 28 . process that involves a.recording and classi . fying information
.b.quantifying transactions into dollars and cents c.preparing accounting report . s d.identifying economic events .
The accounting process involves all of the following except 29 .
a.communicating financial information to users by preparing financial reports . b.analyzing and interpr . eting financial reports c.identifying economic trans .
actions that are relevant to the business d.recording nonquantifi . able economic events
Accountants refer to an economic event as a 30 . a.purchase . b.change in ownership . c.transaction . d.sale .