Topic: 01-20 Previewing Financial Statements
156. Revenue is recognized in most businesses
A. when the customer's order is received.
B. only if the transaction creates an account receivable
C. only if paid in cash
D. upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price
E. when cash from a sale is received
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
157. Businesses can take the following form(s)
A. sole proprietorship
B. not-for-profit
C. partnership
D. sole proprietorship and partnership
E. All of these
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
158. The recording of financial transactions either manually or electronically is called
A. accounting
B. bookkeeping
C. preparing financial statements
D. auditing
E. systems design
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-03 Focus of Accounting
159. Internal controls are procedures set up to
A. protect assets
B. ensure accounting reports are free from error, neutral and complete
C. promote efficiency
D. ensure company policies are followed
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
160. If a business is not being sold or closed, the amounts reported in the accounts for assets used in operations are based on costs. This practice is justified by the
A. historical cost principle
B. going concern principle
C. revenue recognition principle
D. business entity principle
E. currency principle
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
161. The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash, and (3) measures revenue as the amount of cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services is called the
A. going concern principle
B. historical cost principle
C. revenue recognition principle
D. currency principle
E. business entity principle
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
162. An obligation of a business that represents the claims of others against the assets of the business is called a(n)
A. asset
B. expense
C. revenue
D. equity
E. liability
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
163. Costs incurred or the using up of assets as a result of the main operations of a business are called
A. liabilities
B. equity
C. revenues
D. expenses
E. net losses
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
164. Payments of cash by a corporation to its shareholders are called
A. dividends
B. cheques
C. shareholder's equity
D. withdrawals
E. expenses
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-06 Identify and explain the content and reporting aims of financial statements.