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

17/11/2020 Client: papadok01 Deadline: 3 days

Question 1

· A corporation: 


·

·

· Is a business legally separate from its owners.

·

·

· Is controlled by the FASB.

·

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· Has shareholders who have unlimited liability for the acts of the corporation.

·

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· Is the same as a limited liability partnership.

·

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· Is not subject to double taxation. 


· 




5 points

Question 2

· Risk is: 


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· Net income divided by average total assets.

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· The reward for investment.

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· The uncertainty about the expected return to be earned.

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· Unrelated to expected return.

·

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· Derived from the idea of getting something back from an investment. 


· 




5 points

Question 3

· Owners of a corporation are called shareholders or stockholders. 

True 
False 





5 points

Question 4

· Of the following accounts, the one that normally has a credit balance is: 


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· Cash.

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· Office Equipment.

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· Wages Payable.

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· Owner, Withdrawals.

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· Sales Salaries Expense.

· 




5 points

Question 5

· A financial statement providing information that helps users understand a company's financial status, and which lists the types and amounts of assets, liabilities, and equity as of a specific date, is called a(n): 


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· Balance sheet.

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· Income statement.

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· Statement of cash flows.

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· Statement of owner's equity.

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· Financial Status Statement.

· 




5 points

Question 6

· Creditors' claims on the assets of a company are called: 


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· Net losses.

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· Expenses.

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· Revenues.

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· Equity.

·

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· Liabilities.

· 




5 points

Question 7

· A customer's promise to pay is called an account payable to the seller. 

True 
False 





5 points

Question 8

· The account used to record the transfers of assets from a business to its owner is: 


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· A revenue account.

·

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· The owner's withdrawals account.

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· The owner's capital account.

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· An expense account.

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· A liability account.

· 




5 points

Question 9

· An income statement reports on investing and financing activities. 

True 
False 





5 points

Question 10

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

True 
False 





5 points

Question 11

· If equity is $300,000 and liabilities are $192,000, then assets equal: 


·

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· $108,000.

·

·

· $192,000.

·

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· $300,000.

·

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· $492,000.

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· $792,000.

· 




5 points

Question 12

· Operating activities: 


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· Are the means organizations use to pay for resources like land, buildings and equipment.

·

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· Involve using resources to research, develop, purchase, produce, distribute and market products and services.

·

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· Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services.

·

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· Are also called asset management.

·

·

· Are also called strategic management. 


· 




5 points

Question 13

· If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have: 


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· Decreased $105,000.

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·

· Decreased $45,000.

·

·

· Increased $30,000.

·

·

· Increased $45,000.

·

·

· Increased $105,000.

· 




5 points

Question 14

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements. 

True 
False

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