Blooms: Remember
Difficulty: Easy
Learning Objective: 01-05 Identify, explain, and apply accounting principles.
Topic: 01-02 Power of Accounting
147. Celery Company has assets of $150,000, liabilities of $90,000, and equity of $60,000. It buys supplies for cash $5,000. What effect would this transaction have on the accounting equation?
A. Assets, $5,000 increase, equity, $5,000 increase.
B. Assets, $5,000 increase, equity, $5,000 decrease.
C. Liabilities, $5,000 increase, equity, $5,000 decrease.
D. Assets, $5,000 decrease, equity, $5,000 decrease.
E. Assets, no effect; liabilities, no effect
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Learning Objective: 01-07 Analyze business transactions by applying the accounting equation.
Topic: 01-22 Transaction Analysis
148. Properties or economic resources owned by a business, also described as probable future economic benefits, are called
A. assets
B. revenues
C. liabilities
D. equity
E. expenses
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
149. The value of assets exchanged for goods or services provided to customers as part of the main operations of a business are called
A. assets
B. revenues
C. liabilities
D. equity
E. expenses
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
150. Assets created by selling products or services on credit are
A. accounts payable
B. accounts receivable.
C. liabilities
D. expenses
E. equity
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
151. The internal functions of a business include
A. research and development
B. purchasing
C. marketing
D. servicing
E. All of these
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Identify users and uses of, and opportunities in, accounting.
Topic: 01-08 Internal Information Users
152. The business entity principle
A. requires that sole proprietors have unlimited liability
B. requires that partnership income be taxed at the partnership level
C. means that business records should be kept separate from the owner's personal records
D. requires that partnerships have written agreements
E. requires that corporations have shareholders
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-05 Identify, explain, and apply accounting principles.
Topic: 01-18 GAAP for Public vs. Private Enterprises
153. The question of when revenue should be recognized on the income statement (according to GAAP) is answered by the
A. revenue recognition principle
B. going concern principle
C. currency principle
D. business entity principle
E. historical cost principle
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-05 Identify, explain, and apply accounting principles.
Topic: 01-18 GAAP for Public vs. Private Enterprises
154. Equity is also known a
A. profit
B. expenses
C. net assets
D. revenue
E. net loss
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.
Topic: 01-20 Previewing Financial Statements
155. The excess of expenses over revenues for a period depict
A. net assets
B. equity
C. loss
D. profit
E. a liability
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.