A) Objectivity principle.
B) Monetary unit assumption.
C) Business entity assumption.
D) Going-concern assumption.
E) Revenue recognition principle.
100) The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:
A) Accounting equation.
B) Measurement (Cost) principle.
C) Going-concern assumption.
D) Realization principle.
E) Business entity assumption.
101) The rule that (1) requires revenue to be recognized when goods or services are provided to customers and (2) at the amount expected to be received from the customer is called the:
A) Going-concern assumption.
B) Measurement (Cost) principle.
C) Revenue recognition principle.
D) Objectivity principle.
E) Business entity assumption.
102) The question of when revenue should be recognized on the income statement according to GAAP is addressed by the:
A) Revenue recognition principle.
B) Going-concern assumption.
C) Objectivity principle.
D) Business entity assumption.
E) Measurement (Cost) principle.
103) The Superior Company acquired a building for $500,000. The building was appraised at a value of $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Superior to record the building on its records at $500,000?
A) Monetary unit assumption.
B) Going-concern assumption.
C) Measurement (Cost) principle.
D) Business entity assumption.
E) Revenue recognition principle.
104) On December 15 of the current year, Conrad Accounting Services signed a $40,000 contract with a client to provide bookkeeping services to the client in the following year. Which accounting principle would require Conrad Accounting Services to record the bookkeeping revenue in the following year and not the year the cash was received?
A) Monetary unit assumption.
B) Going-concern assumption.
C) Measurement (Cost) principle.
D) Business entity assumption.
E) Revenue recognition principle.
105) Marsha Bogswell is the owner of Bogswell Legal Services. Which accounting principle requires Marsha to keep her personal financial information separate from the financial information of Bogswell Legal Services?
A) Monetary unit assumption.
B) Going-concern assumption.
C) Measurement (Cost) principle.
D) Business entity assumption.
E) Expense recognition (Matching) principle.
106) A limited liability company (LLC):
A) Has owners called members.
B) Is subject to double taxation.
C) Includes a general owner with unlimited liability.
D) Is the same as a corporation.
E) Must have more than one owner.
107) A partnership:
A) Is also called a sole proprietorship.
B) Has unlimited liability for its partners.
C) Has to have a written agreement in order to be legal.
D) Is a legal organization separate from its owners.
E) Has owners called shareholders.
108) Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?
A) Going-concern assumption.
B) Expense recognition (Matching) principle..
C) Measurement (Cost) principle.
D) Business entity assumption.
E) Consideration assumption.
109) Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?
A) Going-concern assumption.
B) Expense recognition (Matching) principle.
C) Measurement (Cost) principle.
D) Business entity assumption.
E) Consideration assumption.
110) Revenue is properly recognized:
A) When the customer makes an order.
B) Only if the transaction creates an account receivable.
C) At the end of the accounting period.
D) When goods or services are provided to customers and at the amount expected to be received from the customer.
E) When cash from a sale is received.
111) All of the following are external users of accounting information except:
A) Lenders.
B) Shareholders.
C) Board of directors.
D) Chief executive officer (CEO).
E) Customers.
112) All of the following are external users of accounting information except:
A) customers.
B) Internal Revenue Service.
C) human resource managers.
D) shareholders.
E) lenders.
113) If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:
A) Assets increase $1,300 and liabilities decrease $1,300.
B) One asset increases $1,300 and another asset decreases $1,300, causing no effect.