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Exam 1: Accounting in Action

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Question 21

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Bookkeeping and accounting are one and the same because the bookkeeping function includes the accounting process.

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Question 22

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John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a

A) joint venture.
B) partnership.
C) corporation.
D) proprietorship.

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Question 23

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Centro-matic Company began the year with stockholders' equity of $30,000. During the year, Centro-matic issued additional shares of stock in exchange for cash of $42,000, recorded expenses of $120,000, and paid dividends of $8,000. If Centro-matic's ending stockholders' equity was $112,000, what was the company's revenue for the year?

All of the following are services offered by public accountants except

Keeping a systematic, chronological diary of events that are measured in dollars and cents is called

If an individual asset is increased, then

If total liabilities increased by $25,000 during a period of time and stockholders' equity decreased by $9,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

Expressing an opinion as to the fairness of the information presented in financial statements is a service performed by CPAs.

Mofro's Computer Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000. During the year, the business recorded $500,000 in computer repair revenues, $300,000 in expenses, and Mofro paid dividends of $50,000. The net income reported by Mofro's Computer Repair Shop for the year was

The first part of the accounting process is

The monetary unit assumption requires that all dollar amounts be rounded to the nearest dollar.

Sources of increases to stockholder's equity are

If the transaction causes an asset account to decrease, which of the following related effects may occur?

Ted Leo is the proprietor (owner) of Ted's, a retailer of golf apparel. When recording the financial transactions of Ted's, Ted does not record an entry for a car he purchased for personal use. Ted took out a personal loan to pay for the car. What accounting concept guides Ted's behavior in this situation?

A working knowledge of accounting is not relevant to a lawyer or an architect.

Generally accepted accounting principles are

Even though a partnership is not a separate legal entity, for accounting purposes the partnership affairs should be kept separate from the personal activities of the owners.

As of June 30, 2015, Actual Tigers Company has assets of $100,000 and stockholders' equity of $40,000. What are the liabilities for Actual Tigers Company as of June 30, 2015?

The accounting process is correctly sequenced as

Andre Dickinson, owner of Andre's Fine Wines, also owns a personal residence that costs $475,000. The market value of his residence is $625,000. During preparation of the financial statements for Andre's Fine Wines, the accounting concept most relevant to the presentation of Andre's home is