Cengage Accounting Exam 1 study guide
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1. A corporation is a business that is legally separate and True
distinct from its owners.
2. The role of accounting is to provide many different True
users with financial information to make economic de-
cisions.
3. Accounting information users need reports about the True
economic activities and condition of businesses.
4. Financial accounting provides information to all users, True
while the main focus for managerial accounting is to
provide information to the management.
5. Proper ethical conduct implies that you only consider False
what's in your best interest.
6. A business is an organization in which basic resources True
or inputs, like materials and labor, are assembled and
processed to provide outputs in the form of goods or
services to customers.
7. All of the following are general-purpose financial state- Cash budget
ments except
8. Which of the following is the best description of ac- Accounting provides infor-
counting's role in business? mation to managers to op-
erate the business and to
other users to make deci-
sions regarding the eco-
nomic condition of the
company.
, Cengage Accounting Exam 1 study guide
Study online at https://quizlet.com/_9m7dy8
9. Which of the following are guidelines for behaving I, II, and III.
ethically?
I.
Identify the consequences of a decision and its effect
on others.
II.
Consider your obligations and responsibilities to those
affected by the decision.
III.
Identify your decision based on personal standards of
honesty and fairness.
10. Which of the items below is not a business entity? entrepreneurship
11. An entity that is organized according to state or federal corporation
statutes and in which ownership is divided into shares
of stock is a
12. On May 20, White Repair Service extended an offer $115,000
of $108,000 for land that had been priced for sale at
$140,000. On May 30, White Repair Service accepted
the seller's counteroffer of $115,000. On June 20, the
land was assessed at a value of $95,000 for property
tax purposes. On July 4, White Repair Service was of-
fered $150,000 for the land by a national retail chain.
At what value should the land be recorded in White
Repair Service's records?
13. The initials GAAP stand for: Generally Accepted Ac-
A) General Accounting Procedures counting Principles
, Cengage Accounting Exam 1 study guide
Study online at https://quizlet.com/_9m7dy8
B) Generally Accepted Plans
C) Generally Accepted Accounting Principles
D) Generally Accepted Accounting Practices
14. The business entity concept means that C) the entity is an indi-
A) an entity is organized according to state or federal vidual economic unit for
statutes which data are recorded,
B) the owner is part of the business entity analyzed, and reported
C) the entity is an individual economic unit for which
data are recorded, analyzed, and reported
D) an entity is organized according to the rules set by
the FASB
15. For accounting purposes, the business entity should B) any of these
be considered separate from its owners if the entity is
A) a corporation
B) any of these
C) a partnership
D) a proprietorship
16. The objectivity concept requires that C) amounts recorded in
A) the Financial Accounting Standards Board be fair the financial statements be
and unbiased in its deliberations over new accounting based on independently
standards verifiable evidence
B) accounting principles meet the objectives of the
Security and Exchange Commission
C) amounts recorded in the financial statements be
based on independently verifiable evidence
D) business transactions be consistent with the objec-
tives of the entity
17. Which of the following is a business transaction? B) purchase inventory on
A) plan advertising for upcoming sale account
Study online at https://quizlet.com/_9m7dy8
1. A corporation is a business that is legally separate and True
distinct from its owners.
2. The role of accounting is to provide many different True
users with financial information to make economic de-
cisions.
3. Accounting information users need reports about the True
economic activities and condition of businesses.
4. Financial accounting provides information to all users, True
while the main focus for managerial accounting is to
provide information to the management.
5. Proper ethical conduct implies that you only consider False
what's in your best interest.
6. A business is an organization in which basic resources True
or inputs, like materials and labor, are assembled and
processed to provide outputs in the form of goods or
services to customers.
7. All of the following are general-purpose financial state- Cash budget
ments except
8. Which of the following is the best description of ac- Accounting provides infor-
counting's role in business? mation to managers to op-
erate the business and to
other users to make deci-
sions regarding the eco-
nomic condition of the
company.
, Cengage Accounting Exam 1 study guide
Study online at https://quizlet.com/_9m7dy8
9. Which of the following are guidelines for behaving I, II, and III.
ethically?
I.
Identify the consequences of a decision and its effect
on others.
II.
Consider your obligations and responsibilities to those
affected by the decision.
III.
Identify your decision based on personal standards of
honesty and fairness.
10. Which of the items below is not a business entity? entrepreneurship
11. An entity that is organized according to state or federal corporation
statutes and in which ownership is divided into shares
of stock is a
12. On May 20, White Repair Service extended an offer $115,000
of $108,000 for land that had been priced for sale at
$140,000. On May 30, White Repair Service accepted
the seller's counteroffer of $115,000. On June 20, the
land was assessed at a value of $95,000 for property
tax purposes. On July 4, White Repair Service was of-
fered $150,000 for the land by a national retail chain.
At what value should the land be recorded in White
Repair Service's records?
13. The initials GAAP stand for: Generally Accepted Ac-
A) General Accounting Procedures counting Principles
, Cengage Accounting Exam 1 study guide
Study online at https://quizlet.com/_9m7dy8
B) Generally Accepted Plans
C) Generally Accepted Accounting Principles
D) Generally Accepted Accounting Practices
14. The business entity concept means that C) the entity is an indi-
A) an entity is organized according to state or federal vidual economic unit for
statutes which data are recorded,
B) the owner is part of the business entity analyzed, and reported
C) the entity is an individual economic unit for which
data are recorded, analyzed, and reported
D) an entity is organized according to the rules set by
the FASB
15. For accounting purposes, the business entity should B) any of these
be considered separate from its owners if the entity is
A) a corporation
B) any of these
C) a partnership
D) a proprietorship
16. The objectivity concept requires that C) amounts recorded in
A) the Financial Accounting Standards Board be fair the financial statements be
and unbiased in its deliberations over new accounting based on independently
standards verifiable evidence
B) accounting principles meet the objectives of the
Security and Exchange Commission
C) amounts recorded in the financial statements be
based on independently verifiable evidence
D) business transactions be consistent with the objec-
tives of the entity
17. Which of the following is a business transaction? B) purchase inventory on
A) plan advertising for upcoming sale account
