ACCT 2000 Exam 1 Lowe-Ardoin Questions With Complete
Solutions
______________ _______________ are obligations that the
company is to pay within the coming year or operating cycle,
whichever is longer. Correct Answers current liabilities
__________________ are assets that do not have a physical
substance yet are often valuable. Correct Answers intangibles
A _____________ expresses the mathematical relationship
among selected items of one quantity and another. Correct
Answers ratio
A company can change to a new method of accounting if
management can justify that the new method results in terms of:
Correct Answers more meaningful financial information
A corporation is a ___________ __________ __________ from
its investors. Correct Answers separate legal entity
A process known as ______________ is used to allocate the cost
of PPE assets to several years. Correct Answers depreciation
A shoe store selling shoes, a dentist cleaning teeth, and a lawn
care company mowing lawns would be examples of
________________ activities. Correct Answers operating
According to the FASB, useful information should possess two
fundamental qualities, _______________ and
,________________________________. Correct Answers
relevance; faithful representation
Accounting information has _____________ if it would make a
difference in a business decision. Correct Answers relevance
Accounting is the information system that ___________,
___________, and ____________ the economic events of an
organization to interested users. Correct Answers identifies;
records; communicates
An account has $300 on the debit side and $900 on the credit
side. What is the account balance? Correct Answers credit of
$600
An item is _____________ if it is likely to influence the
decision of an investor or creditor. Correct Answers material
Assets considered investments are investments in ____________
and ___________ of other companies that are held for more than
one year, Correct Answers stocks; bonds
Assets, liabilities, or stockholder's equity items change as a
result of transactions and there is a ________ effect on the
accounting equation. Correct Answers dual
Borrowing money from creditors and issuing (selling) shares of
stock to investors are examples of ___________. Correct
Answers financing
, Current assets are assets that a company expects to
_________________________ or ________________ within
one year or the operating cycle, whichever is longer. Correct
Answers convert to cash; use up
Current assets are listed in the order in which they can be
___________________________, also known as liquidity.
Correct Answers converted into cash
Currents liabilities are usually in order of __________ payable,
_____________ payable, and then the others in order of
______________. Correct Answers notes; account; magnitude
Debits must _________ credits are each transaction. Correct
Answers equal
Each transaction must affect ______________ accounts to keep
the basic accounting equation in _____________. Correct
Answers two or more; balance
Effective financial reporting depends on sound __________
______________. Correct Answers ethic behavior
Every business, regardless of the form, needs separate
_______________ entities. Correct Answers accounting
Examples of periodicity: Correct Answers month, year, quarter
Examples of things that do not matter to accounting records:
Correct Answers customer satisfaction or hiring a new
employee
Solutions
______________ _______________ are obligations that the
company is to pay within the coming year or operating cycle,
whichever is longer. Correct Answers current liabilities
__________________ are assets that do not have a physical
substance yet are often valuable. Correct Answers intangibles
A _____________ expresses the mathematical relationship
among selected items of one quantity and another. Correct
Answers ratio
A company can change to a new method of accounting if
management can justify that the new method results in terms of:
Correct Answers more meaningful financial information
A corporation is a ___________ __________ __________ from
its investors. Correct Answers separate legal entity
A process known as ______________ is used to allocate the cost
of PPE assets to several years. Correct Answers depreciation
A shoe store selling shoes, a dentist cleaning teeth, and a lawn
care company mowing lawns would be examples of
________________ activities. Correct Answers operating
According to the FASB, useful information should possess two
fundamental qualities, _______________ and
,________________________________. Correct Answers
relevance; faithful representation
Accounting information has _____________ if it would make a
difference in a business decision. Correct Answers relevance
Accounting is the information system that ___________,
___________, and ____________ the economic events of an
organization to interested users. Correct Answers identifies;
records; communicates
An account has $300 on the debit side and $900 on the credit
side. What is the account balance? Correct Answers credit of
$600
An item is _____________ if it is likely to influence the
decision of an investor or creditor. Correct Answers material
Assets considered investments are investments in ____________
and ___________ of other companies that are held for more than
one year, Correct Answers stocks; bonds
Assets, liabilities, or stockholder's equity items change as a
result of transactions and there is a ________ effect on the
accounting equation. Correct Answers dual
Borrowing money from creditors and issuing (selling) shares of
stock to investors are examples of ___________. Correct
Answers financing
, Current assets are assets that a company expects to
_________________________ or ________________ within
one year or the operating cycle, whichever is longer. Correct
Answers convert to cash; use up
Current assets are listed in the order in which they can be
___________________________, also known as liquidity.
Correct Answers converted into cash
Currents liabilities are usually in order of __________ payable,
_____________ payable, and then the others in order of
______________. Correct Answers notes; account; magnitude
Debits must _________ credits are each transaction. Correct
Answers equal
Each transaction must affect ______________ accounts to keep
the basic accounting equation in _____________. Correct
Answers two or more; balance
Effective financial reporting depends on sound __________
______________. Correct Answers ethic behavior
Every business, regardless of the form, needs separate
_______________ entities. Correct Answers accounting
Examples of periodicity: Correct Answers month, year, quarter
Examples of things that do not matter to accounting records:
Correct Answers customer satisfaction or hiring a new
employee
