Question 1

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-A future benefit.

Accepted Answer

Assets are resources owned by a business that are expected to bring future benefits.

Question 2

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-The cost of doing business that results from the process of generating revenues.

Accepted Answer

The cost of doing business is an expense, which is a cost incurred in the process of generating revenues.

Question 3

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-The sale of goods or the performance of services.

Accepted Answer

The answer of For each statement provided, choose the letter...

Question 4

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-An artificial segment on the calendar used as a basis for preparing financial statements.

Accepted Answer

The term "time period" refers to a specific artificial segment on the calendar used as a basis for preparing financial statements, such as a month, a quarter, or a year.

Note: None of the other terms listed in the question refer specifically to a time period.

Question 5

Provided below is a list of important users of accounting information.Below the list are descriptions of a major need of each of the various users.Fill in the blank with the one user group that is most likely to have the need described to the right of the blank.Some user groups may be used more than once or not at all.
-The profitability of each division of the company.

Accepted Answer

The major need of company management is to evaluate the profitability of each division of the company. A supplier would be more concerned with the company's ability to pay its bills, a banker would be interested in the company's overall financial position and creditworthiness, the Internal Revenue Service would be interested in the company's tax liabilities, the Securities and Exchange Commission would be interested in the accuracy and completeness of the company's financial disclosures, and a labor union would be interested in the company's labor costs and benefits. Although stockholders would be interested in profitability, they are not the most likely user group to have this need.

Question 6

Match the following business forms with their characteristics below.
-A share of stock acts as evidence of ownership

Accepted Answer

A share of stock is evidence of ownership in a corporation.

Question 7

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-A distribution of the net income of a business to its owners.

Accepted Answer

Dividends are a distribution of the net income of a business to its owners, fitting the description provided.

Question 8

Provided below is a list of important users of accounting information.Below the list are descriptions of a major need of each of the various users.Fill in the blank with the one user group that is most likely to have the need described to the right of the blank.Some user groups may be used more than once or not at all.
-The profitability of the company based upon the Internal Revenue Code.

Accepted Answer

The Internal Revenue Service (IRS) is responsible for enforcing the Internal Revenue Code, which includes regulations regarding a company's profitability and tax liabilities. Therefore, the IRS has a major need for information on the profitability of the company. Stockholders, company management, suppliers, bankers, and labor unions may also be interested in understanding the profitability of the company, but their needs are not specifically related to the Internal Revenue Code. The Securities and Exchange Commission (SEC) may also require information on the profitability of the company, but this need is more focused on ensuring that accurate and reliable financial information is being provided to the investing public.

Question 9

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-The assumption that an entity is not in the process of liquidation and that it will continue indefinitely.

Accepted Answer

The assumption that an entity will continue indefinitely is known as the "going concern" concept, which is represented by choice M.

Question 10

Match the following business forms with their characteristics below.
-Usually owned and operated by the same person

Accepted Answer

A sole proprietorship is a business form that is owned and operated by a single individual.

Question 11

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-A category on the balance sheet to indicate the owners' direct investment in a corporation.

Accepted Answer

Capital stock represents the owners' direct investment in a corporation, reflecting the equity that shareholders have from purchasing shares.

Question 12

Match the following business forms with their characteristics below.
-Owned by two or more individuals

Accepted Answer

A partnership is owned by two or more individuals who share profits and losses. A sole proprietorship is owned by a single individual, and a corporation is owned by shareholders.

Question 13

Provided below is a list of important users of accounting information.Below the list are descriptions of a major need of each of the various users.Fill in the blank with the one user group that is most likely to have the need described to the right of the blank.Some user groups may be used more than once or not at all.
-The prospects for future dividend payments.

Accepted Answer

Stockholders are the primary stakeholders concerned with the prospects for future dividend payments, as dividends are a major source of return on investment for shareholders. Company management may also be concerned with dividend payments, but their primary concern would be overall financial performance and profitability. Suppliers, bankers, the IRS, SEC, and labor unions are not typically concerned with dividend payments.

Question 14

Provided below is a list of important users of accounting information.Below the list are descriptions of a major need of each of the various users.Fill in the blank with the one user group that is most likely to have the need described to the right of the blank.Some user groups may be used more than once or not at all.
-The financial status of a company issuing securities to the public for the first time.

Accepted Answer

The Securities and Exchange Commission (SEC) is responsible for regulating securities offerings in the US, including the initial public offerings (IPOs). They require companies to provide detailed financial information to potential investors before they can issue securities to the public. Therefore, the SEC would require the financial status of the company issuing securities to the public for the first time.

Question 15

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-The owners' claims on the assets of an entity.

Accepted Answer

Owners' equity represents the owners' claims on the assets of the entity.

Answer: O
 A corporation is a legal entity that can own assets, incur liabilities, and conduct business activities.

Answer: H
 Retained earnings represent the cumulative profits earned by a company that have not been distributed to shareholders as dividends, and therefore represent a portion of owners' equity.

Answer: K
 A liability is an obligation or debt that is owed to another party.

Answer: L
 Revenue represents the earnings generated from a company's business activities, such as sales of goods or services.

Answer: J
 A creditor is a party to whom a debt is owed, such as a lender or supplier.

Answer: G
 An expense is a cost incurred by a company in order to generate revenue.

Answer: E
 Dividends represent the portion of a company's profits that are distributed to shareholders.

Answer: M
 The going concern concept assumes that a company will continue to operate in the future, and therefore its assets and liabilities are valued based on the assumption that the company will not be liquidated.

Answer: I
 The cost principle requires that a company's assets be recorded at their original cost, rather than their current market value.

Answer: A
 Capital stock represents the ownership interest in a corporation that is represented by shares of stock.

Answer: N
 The monetary unit concept assumes that financial statements should be reported in a common currency, such as U.S. dollars, and therefore all transactions are recorded in terms of that currency.

Answer: D
 A time period is the specific period of time over which financial statements are prepared, such as a month, quarter, or year.

Question 16

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-The portion of owner's equity that represents the net income less any dividends paid over the life of the entity.

Accepted Answer

Retained earnings represent the portion of owner's equity that is the accumulation of net income less any dividends paid over the life of the entity.

Question 17

Match the following business forms with their characteristics below.
-Control most private resources in the U.S.

Accepted Answer

Corporations are the business form that control most private resources in the U.S. due to their ability to sell stocks and raise large amounts of capital from investors. Sole proprietorships and partnerships are typically smaller entities with limited resources and ownership structures.

Question 18

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all.
-The principle or rule that specifies the amount recorded for an asset upon acquisition.

Accepted Answer

The cost principle specifies that the amount recorded for an asset upon acquisition should be its cost, which includes all necessary expenses to get the asset ready for its intended use.

Question 19

Provided below is a list of important users of accounting information.Below the list are descriptions of a major need of each of the various users.Fill in the blank with the one user group that is most likely to have the need described to the right of the blank.Some user groups may be used more than once or not at all.
-The company's profitability since the last work force contract was signed.

Accepted Answer

Labor unions are interested in a company's profitability to negotiate wages, benefits, and working conditions for their members. They use this information to assess the company's ability to meet their demands.

Question 20

Provided below is a list of important users of accounting information.Below the list are descriptions of a major need of each of the various users.Fill in the blank with the one user group that is most likely to have the need described to the right of the blank.Some user groups may be used more than once or not at all.
-The exact amount of profit on each product of the company.

Accepted Answer

Company management is most likely to have the need for knowing the exact amount of profit on each product, as this information can help them make decisions about which products to continue producing and which ones to discontinue. Stockholders may also be interested in this information, but their primary concern is usually the overall profitability of the company, rather than the profitability of individual products. Suppliers, bankers, the IRS, SEC, and labor unions are unlikely to have a need for this specific information.

Quiz 1: Accounting As a Form of Communication

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -A future benefit.

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -The cost of doing business that results from the process of generating revenues.

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -The sale of goods or the performance of services.

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -An artificial segment on the calendar used as a basis for preparing financial statements.

Match the following business forms with their characteristics below. -A share of stock acts as evidence of ownership

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -A distribution of the net income of a business to its owners.

Match the following business forms with their characteristics below. -Usually owned and operated by the same person

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -A category on the balance sheet to indicate the owners' direct investment in a corporation.

Match the following business forms with their characteristics below. -Owned by two or more individuals

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -The owners' claims on the assets of an entity.

Match the following business forms with their characteristics below. -Control most private resources in the U.S.

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -The principle or rule that specifies the amount recorded for an asset upon acquisition.