MGMT 200 Exam 1
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1. accounting is a system of maintaining records of a company's operations
and communicating that to decision makers.
true or false?: true
2. what makes accounting a valuable discipline?
a. it stores financial information in accounts
b. provides information to make decisions
c. records events and transactions
d. produces financial reports: b. provides information to make decisions
3. financial accounting does not deal with which of the following?
a. measuring a company's economic activity
b. preparing financial reports
c. communicating financial results to investors
d. providing information to internal users: d. providing information to internal
users
4. which of the following groups is NOT among the external users for whom
financial statements are prepared?
a. creditors
b. managers
c. regulators
d. investors
e. customers: b. managers
5. product profitability reports for a business are considered
a. financial accounting
b. managerial accounting: b. managerial accounting
6. preparing a budget for a business is considered
a. financial accounting
b. managerial accounting: b. managerial accounting
7. which of the following would NOT be an objective of external users reading
a company's financial statements
a. understanding the current financial statements of the company
b. assessing the company's contribution to social politics
c. predicting the company's future financial performance
d. evaluating the company's ability to generate cash from the business: b.
assessing the company's contribution to social politics
8. what is the primary purpose of financial accounting?
a. communicate business activities to internal management
b. determine the amount of tax liabilities owed to various government jurisdic-
tions
c. measure the profitability of the company in order to assist employees with
, MGMT 200 Exam 1
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making decisions
d. measure business activities and communicate those measures to external
users to make decisions: d. measure business activities and communicate those
measures to external users to make decisions
9. when a company receives a product previously ordered, a recordable ac-
counting transaction has occurred
a. yes
b. no: a. yes
10. when a company inquires about the availability of inventory, a transaction
has occurred
a. yes
b. no: b. no
11. when payment is received for services not yet rendered, no entry is record-
ed until that service has been rendered
a. true
b. false: b. false
12. which of the following business events is not a transaction recorded in
financial accounting
a. purchasing a service
b. paying wages
c. receiving goods
d. signing an agreement with a supplier: d. signing an agreement with a supplier
13. an alternative form of the accounting equation is:
a. net income = revenues - expenses
b. assets = liabilities - stockholders' equity
c. assets - liabilities = stockholder's equity
d. stockholders' equity = assets + liabilities: c. assets - liabilities = stockholders'
equity
14. the resources of a company are referred to as:
a. suppliers
b. assets
c. liabilities
d. creditors: b. assets
15. liabilities can be best described as:
a. the amount owed to creditors
b. the amount of services provided to customers during the year
c. the amount of expenses over the past year
d. the amount expected to be distributed to stockholders: a. the amount owed
to creditors
, MGMT 200 Exam 1
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16. what is the best definition of an asset?
a. cash of a company in the bank
b. resources that benefit future operations
c. owners' investment in the business
d. common stock: b. resources that benefit future operations
17. what is the best definition of an accounts receivable?
a. an amount owed by the company to others
b. owners' investment in the business
c. amounts owed by customers to a company
d. an account
e. none of the above: c. amounts owed by customers to a company
18. those who lend money or deliver goods and services before being paid are
called
a. investors
b. borrowers
c. creditors
d. debtors: c. creditors
19. if total assets increased $30,000 during a period and total liabilities in-
creased $12,000 during the same period, the amount and direction (increase
or decrease) of the change in stockholders' equity for that period is:
a. a $42,000 increase
b. a $42,000 decrease
c. an $18,000 decrease
d. an $18,000 increase: d. an $18,000 increase
20. at the end of its year, J&L Services Inc., a computer services business, had
total assets of $25,000 and equity of $10,000. How much were J&L Services'
liabilities?
a. $35,000
b. $25,000
c. $15,000
d. $10,000: c. $15,000
21. the amounts recorded when the company sells products or provides ser-
vices to customers are referred to as:
a. assets
b. liabilities
c. revenues
d. expenses: c. revenues
22. which of the following best describes revenue?
a. cash received from a customer
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1. accounting is a system of maintaining records of a company's operations
and communicating that to decision makers.
true or false?: true
2. what makes accounting a valuable discipline?
a. it stores financial information in accounts
b. provides information to make decisions
c. records events and transactions
d. produces financial reports: b. provides information to make decisions
3. financial accounting does not deal with which of the following?
a. measuring a company's economic activity
b. preparing financial reports
c. communicating financial results to investors
d. providing information to internal users: d. providing information to internal
users
4. which of the following groups is NOT among the external users for whom
financial statements are prepared?
a. creditors
b. managers
c. regulators
d. investors
e. customers: b. managers
5. product profitability reports for a business are considered
a. financial accounting
b. managerial accounting: b. managerial accounting
6. preparing a budget for a business is considered
a. financial accounting
b. managerial accounting: b. managerial accounting
7. which of the following would NOT be an objective of external users reading
a company's financial statements
a. understanding the current financial statements of the company
b. assessing the company's contribution to social politics
c. predicting the company's future financial performance
d. evaluating the company's ability to generate cash from the business: b.
assessing the company's contribution to social politics
8. what is the primary purpose of financial accounting?
a. communicate business activities to internal management
b. determine the amount of tax liabilities owed to various government jurisdic-
tions
c. measure the profitability of the company in order to assist employees with
, MGMT 200 Exam 1
Study online at https://quizlet.com/_hdvkgr
making decisions
d. measure business activities and communicate those measures to external
users to make decisions: d. measure business activities and communicate those
measures to external users to make decisions
9. when a company receives a product previously ordered, a recordable ac-
counting transaction has occurred
a. yes
b. no: a. yes
10. when a company inquires about the availability of inventory, a transaction
has occurred
a. yes
b. no: b. no
11. when payment is received for services not yet rendered, no entry is record-
ed until that service has been rendered
a. true
b. false: b. false
12. which of the following business events is not a transaction recorded in
financial accounting
a. purchasing a service
b. paying wages
c. receiving goods
d. signing an agreement with a supplier: d. signing an agreement with a supplier
13. an alternative form of the accounting equation is:
a. net income = revenues - expenses
b. assets = liabilities - stockholders' equity
c. assets - liabilities = stockholder's equity
d. stockholders' equity = assets + liabilities: c. assets - liabilities = stockholders'
equity
14. the resources of a company are referred to as:
a. suppliers
b. assets
c. liabilities
d. creditors: b. assets
15. liabilities can be best described as:
a. the amount owed to creditors
b. the amount of services provided to customers during the year
c. the amount of expenses over the past year
d. the amount expected to be distributed to stockholders: a. the amount owed
to creditors
, MGMT 200 Exam 1
Study online at https://quizlet.com/_hdvkgr
16. what is the best definition of an asset?
a. cash of a company in the bank
b. resources that benefit future operations
c. owners' investment in the business
d. common stock: b. resources that benefit future operations
17. what is the best definition of an accounts receivable?
a. an amount owed by the company to others
b. owners' investment in the business
c. amounts owed by customers to a company
d. an account
e. none of the above: c. amounts owed by customers to a company
18. those who lend money or deliver goods and services before being paid are
called
a. investors
b. borrowers
c. creditors
d. debtors: c. creditors
19. if total assets increased $30,000 during a period and total liabilities in-
creased $12,000 during the same period, the amount and direction (increase
or decrease) of the change in stockholders' equity for that period is:
a. a $42,000 increase
b. a $42,000 decrease
c. an $18,000 decrease
d. an $18,000 increase: d. an $18,000 increase
20. at the end of its year, J&L Services Inc., a computer services business, had
total assets of $25,000 and equity of $10,000. How much were J&L Services'
liabilities?
a. $35,000
b. $25,000
c. $15,000
d. $10,000: c. $15,000
21. the amounts recorded when the company sells products or provides ser-
vices to customers are referred to as:
a. assets
b. liabilities
c. revenues
d. expenses: c. revenues
22. which of the following best describes revenue?
a. cash received from a customer
