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Exam 1: Accounting in Business

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Question 111

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Savvy Sightseeing had beginning equity of $72,000;revenues of $90,000,expenses of $65,000,and withdrawals by owners of $9,000.Calculate the ending equity.

A) $88,000.
B) $25,000.
C) $97,000.
D) $38,000.
E) $47,000.

F) C) and E)
G) All of the above

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Question 112

Multiple Choice

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Rushing had income of $150 million and average invested assets of $1,800 million.Its return on assets is:

A) 8.3%.
B) 83.3%.
C) 12%.
D) 120%.
E) 16.7%.

F) A) and E)
G) D) and E)

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Question 113

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External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.

The basic financial statements include all of the following except:

The records of Roadmaster Auto Rentals show the following information as of December 31.The owner,Rob Fletcher withdrew $52,000 during the year for personal expenses.Prepare a December income statement,a December statement of owner's equity,and a December 30 balance sheet.

A net loss occurs when revenues exceed expenses.

If assets are $300,000 and liabilities are $192,000,then equity equals:

Increases in equity from a company's sales of products or services are:

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

A company's balance sheet shows: cash $24,000,accounts receivable $30,000,equipment $50,000,and equity $72,000.What is the amount of liabilities?

An example of a financing activity is:

A company's balance sheet shows: cash $22,000,accounts receivable $16,000,office equipment $50,000,and accounts payable $17,000.What is the amount of owner's equity?

In accounting,the rule that requires that assets,services,and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ______________________________.

A disadvantage of a sole proprietorship is the fact that the owner has ______________.

The three major types of business activities are operating,financing,and investing.

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit.How does this transaction affect the accounting equation for Atkins?

If assets are $99,000 and liabilities are $32,000,then equity equals:

Return on assets is often stated in ratio form as the amount of average total assets divided by income.

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.