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13 Cards in this Set
- Front
- Back
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All of the followingstatements are true except one. Which statement is false?·
a.A proprietorship is abusiness with several owners.· b.Bookkeeping is only apart of accounting.· c.Professional accountantsare held to a high standard of ethical conduct.· d.The organization thatformulates generally accepted accounting principles in the United States is theFinancial Accounting Standards Board. |
a.A proprietorship is a business with several owners. |
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The valuation of assetson the balance sheet is generally based on· a.selling price.· b.what it would cost toreplace the asset.· c.current fair market valueas established by independent appraisers.· d.historical cost |
d.historical cost |
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The accounting equationcan be expressed as: |
Assets = Liabilities + Owners’ equity |
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The nature of an asset isbest described as |
an economic resource that’sexpected to benefit future operations. |
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financial statement covering a period of time |
Income statement and Statement of cash flows |
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How would net income be most likely to affect the accounting equation? |
· Increase assets and increase stockholders’ equity |
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During the year, Aynsley,Inc., has $280,000 in revenues, $145,000 in expenses, and $6,000 in dividenddeclarations and payments. Stockholders’ equity changed by
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+129,000
($280,000 − $145,000 − $6,000 = $129,000) |
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Mighty Corporation holdscash of $8,000 and owes $31,000 on accounts payable. Mighty has accountsreceivable of $47,000, inventory of $28,000, and land that cost $40,000. Howmuch are Mighty’s total assets and liabilities?
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Total assets = $123,000 ($8,000 + $47,000 + $28,000 + $40,000).
Liabilities = $31,000 |
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Which item(s) is (are)reported on the balance sheet?
a.Retained earnings· b.Inventory· c.Accounts payable· d.All of the above |
d.All of the above
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During the year, RomeroCompany’s stockholders’ equity increased from $98,000 to $116,000. Romeroearned net income of $25,000. Assume no changes in the capital stock accounts.How much in dividends did Romero declare during the year?
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$7,000 ($98,000 + Net income $25,000 − Dividends $7,000 = $116,000) |
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Parret Company had totalassets of $175,000 and total stockholders’ equity of $78,000 at the beginningof the year. During the year, assets increased by $42,000 and liabilitiesincreased by $12,000. Stockholders’ equity at the end of the year is
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$108,000
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Which of the following isa true statement about International Financial Reporting Standards?
a.They are not needed forU.S. businesses since the United States already has the strongest accountingstandards in the world. b.They are not beingapplied anywhere in the world yet, but soon they will be. c.They are converginggradually with U.S. standards. d.They are more exact(contain more rules) than U.S. generally accepted accounting principles. |
c.They are converging gradually with U.S. standards.
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Which of the following isthe most accurate statement regarding ethics as applied to decision making inaccounting?
a.Ethics involves makingdifficult choices under pressure and should be kept in mind in making everydecision, including those involving accounting. b.It is impossible to learnethical decision making, since it is just something you decide to do or not todo. c.Ethics has no place inaccounting, since accounting deals purely with numbers. d.Ethics is becoming lessand less important as a field of study in business. |
a.Ethics involves making difficult choices under pressure and should be kept in mind in making every decision, including those involving accounting.
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