ACCT 2301 Exam 1 Revision
Questions And Answers
2025-2026 GRADED A+
The field of accounting that focuses on providing information for external
decision makers is ________. - ANS-financial accounting
Which of the following is a decision made by an internal user? - ANS-How much
money should the business budget for production?
GAAP refers to guidelines for accounting information in the United States. The
acronym GAAP in this statement refers to ________. - ANS-Generally Accepted
Accounting Principles
As per the ________, the entity will remain in operation for the foreseeable future.
- ANS-going concern assumption
Which of the following organizations is responsible for the creation and
governance of accounting standards in the United States? - ANS-Financial
Accounting Standards Board
Regarding the accounting equation, which of the following is a correct
statement? - ANS-All of the statements are correct.
Maxwell Plumbing Services earned $500 by completing a job for Smith Company.
The $500 earned by Maxwell Plumbing Services is its ________. - ANS-revenue
Which of the following is true of assets? - ANS-Assets are something of value the
business owns or controls.
Adventures Unlimited Company distributes cash dividends. How does this
transaction affect the accounting equation? - ANS-The assets decrease and
equity decreases.
, If the Assets of a company increased by $200,000 during the year and its
Owner's Equity decreased by
$70,000 during the year, then the change in Liabilities of the company during the
year must have been - ANS-An increase of $270,000
How would net income most likely affect the accounting equation? - ANS-
Increase assets and increase stockholders' equity
Which of the following statements best defines financial statements? - ANS-
Financial statements are business documents that report on a business in
monetary terms, providing information to help users make informed business
decisions.
Which of the following is the correct order of preparation of financial statements?
- ANS-Income statement
right arrow→
statement of retained earnings
right arrow→
balance sheet
right arrow→
statement of cash flows
Following is a list of account balances of Lincoln Lawn Services as of December
31, after the first year of operations.
Accounts Receivable$6,000
Accounts Payable$6,000
Salaries Expense$4,000 - ANS-$21,100
Which of the following financial statements would be most useful if an analyst
wants to know the profitability of a company? - ANS-income statement
Assume Metro Corporation had a net income of $2,500 for the year ending
December 2018. Its beginning and ending total assets were $32,500 and
$19,500, respectively. Calculate Metro's return on assets (ROA). (Round your
percentage answer to two decimal places.) - ANS-9.62%
Questions And Answers
2025-2026 GRADED A+
The field of accounting that focuses on providing information for external
decision makers is ________. - ANS-financial accounting
Which of the following is a decision made by an internal user? - ANS-How much
money should the business budget for production?
GAAP refers to guidelines for accounting information in the United States. The
acronym GAAP in this statement refers to ________. - ANS-Generally Accepted
Accounting Principles
As per the ________, the entity will remain in operation for the foreseeable future.
- ANS-going concern assumption
Which of the following organizations is responsible for the creation and
governance of accounting standards in the United States? - ANS-Financial
Accounting Standards Board
Regarding the accounting equation, which of the following is a correct
statement? - ANS-All of the statements are correct.
Maxwell Plumbing Services earned $500 by completing a job for Smith Company.
The $500 earned by Maxwell Plumbing Services is its ________. - ANS-revenue
Which of the following is true of assets? - ANS-Assets are something of value the
business owns or controls.
Adventures Unlimited Company distributes cash dividends. How does this
transaction affect the accounting equation? - ANS-The assets decrease and
equity decreases.
, If the Assets of a company increased by $200,000 during the year and its
Owner's Equity decreased by
$70,000 during the year, then the change in Liabilities of the company during the
year must have been - ANS-An increase of $270,000
How would net income most likely affect the accounting equation? - ANS-
Increase assets and increase stockholders' equity
Which of the following statements best defines financial statements? - ANS-
Financial statements are business documents that report on a business in
monetary terms, providing information to help users make informed business
decisions.
Which of the following is the correct order of preparation of financial statements?
- ANS-Income statement
right arrow→
statement of retained earnings
right arrow→
balance sheet
right arrow→
statement of cash flows
Following is a list of account balances of Lincoln Lawn Services as of December
31, after the first year of operations.
Accounts Receivable$6,000
Accounts Payable$6,000
Salaries Expense$4,000 - ANS-$21,100
Which of the following financial statements would be most useful if an analyst
wants to know the profitability of a company? - ANS-income statement
Assume Metro Corporation had a net income of $2,500 for the year ending
December 2018. Its beginning and ending total assets were $32,500 and
$19,500, respectively. Calculate Metro's return on assets (ROA). (Round your
percentage answer to two decimal places.) - ANS-9.62%
