MGMT 200 EXAM 1 PURDUE UNIVERSITY QUESTIONS AND
ANSWERS ALREADY PASSED.
Preparing a budget for a business is
consideredA. financial accounting.
B. managerial accounting. - Correct answer-B. managerial accounting.
(Management accounting provides information to people within an organization
whilefinancial accounting is mainly for those outside it, such as shareholders.)
Accounting is the information system
thatA. measures business activities
• communicates the results to
decision makers
• processes information into reports
• all of the above. - Correct answer-D. all of the above.
Which of the following is not an external user
ofa business's financial information?
A. Taxing
authoritiesB.
Customers
C. Employees
D. Investors - Correct answer-C. Employees
Which statement below best describes the accounting
equation?
• The change in retained earnings equals
netincome less dividends.
• Equality of revenue and expense
transactionsover time.
• Financing activities equal investing
andoperating activities.
• Resources of the company equal creditors' and
owners' claims to those resources. - Correct answer-D. Resources of the
companyequal creditors' and
owners' claims to those resources.
(assets = liabilities + stockholders'
equity)
Owners' claims to the company's resources
arereferred to as:
• Liabiliti
es.
• Assets.
• Stockholders' equity.
, • Net liabilities. - Correct answer-C. Stockholders'
equity.(assets = liabilities + stockholders' equity)
If total assets of a company equal $25,000
and total stockholders' equity equals
$10,000, thentotal liabilities equal $15,000.
• True
• False - Correct answer-A.
True(Assets = Liabilities +
Equity
$25,000 = $15,000 + $10,000)
Amounts owed to suppliers for supplies
purchased on account are defined as
a(n):A. Revenue.
• Asset
.
• Liabili
ty.
• Expense. - Correct answer-C.
Liability (assets = liabilities +
stockholders' equity)
If total liabilities of a company equal
$29,000 and total stockholders' equity
equals $15,000,then total assets equal
$14,000.
• True
• False - Correct answer-B.
False(Assets = Liabilities +
Equity
$44,000 = $29,000 + $15,000)
Financial accounting does not deal with which of the
following? A. Measuring a company's economic activity.
B. Providing information to internal
users.C. Preparing financial reports.
D. Communicating financial results to
investors. - Correct answer-B. Providing information to internal users.
The accounting equation shows that a
company's resources equal creditors' and owners' claims to those
resources.A. True
B. False - Correct answer-A. True
An alternative form of the accounting equation is:
ANSWERS ALREADY PASSED.
Preparing a budget for a business is
consideredA. financial accounting.
B. managerial accounting. - Correct answer-B. managerial accounting.
(Management accounting provides information to people within an organization
whilefinancial accounting is mainly for those outside it, such as shareholders.)
Accounting is the information system
thatA. measures business activities
• communicates the results to
decision makers
• processes information into reports
• all of the above. - Correct answer-D. all of the above.
Which of the following is not an external user
ofa business's financial information?
A. Taxing
authoritiesB.
Customers
C. Employees
D. Investors - Correct answer-C. Employees
Which statement below best describes the accounting
equation?
• The change in retained earnings equals
netincome less dividends.
• Equality of revenue and expense
transactionsover time.
• Financing activities equal investing
andoperating activities.
• Resources of the company equal creditors' and
owners' claims to those resources. - Correct answer-D. Resources of the
companyequal creditors' and
owners' claims to those resources.
(assets = liabilities + stockholders'
equity)
Owners' claims to the company's resources
arereferred to as:
• Liabiliti
es.
• Assets.
• Stockholders' equity.
, • Net liabilities. - Correct answer-C. Stockholders'
equity.(assets = liabilities + stockholders' equity)
If total assets of a company equal $25,000
and total stockholders' equity equals
$10,000, thentotal liabilities equal $15,000.
• True
• False - Correct answer-A.
True(Assets = Liabilities +
Equity
$25,000 = $15,000 + $10,000)
Amounts owed to suppliers for supplies
purchased on account are defined as
a(n):A. Revenue.
• Asset
.
• Liabili
ty.
• Expense. - Correct answer-C.
Liability (assets = liabilities +
stockholders' equity)
If total liabilities of a company equal
$29,000 and total stockholders' equity
equals $15,000,then total assets equal
$14,000.
• True
• False - Correct answer-B.
False(Assets = Liabilities +
Equity
$44,000 = $29,000 + $15,000)
Financial accounting does not deal with which of the
following? A. Measuring a company's economic activity.
B. Providing information to internal
users.C. Preparing financial reports.
D. Communicating financial results to
investors. - Correct answer-B. Providing information to internal users.
The accounting equation shows that a
company's resources equal creditors' and owners' claims to those
resources.A. True
B. False - Correct answer-A. True
An alternative form of the accounting equation is:
