Question 1

Match the following terms with the appropriate definition.
-Persons using accounting information who are directly involved in managing and operating the organization.

Accepted Answer

Internal users are those individuals within the organization, such as managers and employees, who use accounting information to help make decisions related to the management and operation of the company.

Question 2

The monetary assumption:

Accepted Answer

The monetary assumption presumes that transactions and events can be expressed in monetary units, which is necessary for a company to measure its financial performance accurately.

Question 3

Which of the following accounts is not included in the asset section of the balance sheet?

Accepted Answer

Wages expense is not an asset, it is an expense that is reported in the income statement. The other options (Buildings, Supplies, Land, and Furniture) are all assets that are reported in the asset section of the balance sheet.

Question 4

Match the following terms with the appropriate definition.
-The part of accounting that involves recording transactions and events,either electronically or manually.

Accepted Answer

Recordkeeping is the process of maintaining records, such as financial transactions, for an organization. This can be done manually or electronically and is a fundamental aspect of accounting.

Question 5

The expense recognition principle,also called the matching principle:

Accepted Answer

The expense recognition principle, also known as the matching principle, prescribes that a company record the expenses it incurred to generate the revenue reported. This principle ensures that expenses are recognized in the same period as the revenue they helped to generate.

Question 6

Which of the following accounts is not included in the liability section of the balance sheet?

Accepted Answer

Accounts receivable is an asset account because it represents money that is owed to the business by its customers. The other options, wages payable, accounts payable, notes payable, and taxes payable, are all liability accounts because they represent money that the business owes to others.

Question 7

The revenue recognition principle:

Accepted Answer

The revenue recognition principle provides guidance on when a company must recognize revenue. It states that revenue should be recognized when it is earned and when it is realized or realizable, and when all the criteria for revenue recognition have been met.

Question 8

The measurement principle,also called the cost principle:

Accepted Answer

The measurement principle, also known as the cost principle, requires that assets and liabilities are recorded in accounting records at their historical cost. Actual cost means the cost at which an asset was purchased or the cost incurred to produce a liability. This principle is essential for maintaining the accuracy and reliability of financial records.

Question 9

Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (or Dodd-Frank)to:

Accepted Answer

All of the choices are correct. The Dodd-Frank Act was designed to promote accountability and transparency in the financial system, put an end to the notion of "too big to fail," protect taxpayers by ending bailouts, and protect consumers from abusive financial services.

Question 10

Which of the following accounts is not included in the asset section of the balance sheet?

Accepted Answer

Services revenue is a revenue account and is not included in the asset section of the balance sheet. The assets section of the balance sheet includes accounts such as cash, accounts receivable, supplies, and land, which are tangible or intangible resources owned or controlled by an entity.

Question 11

Which of the following accounts is not included in the calculation of net income?

Accepted Answer

Cash is not included in the calculation of net income as it is an asset account and does not represent revenue or expenses. Net income is calculated by subtracting all expenses (such as wages and rent) from all revenue (such as services and rent revenue) within a given time period.

Question 12

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Accepted Answer

Options A, B, C, and E all result in a net income of $20,000 ($80,000 - $60,000, $170,000 - $150,000, $60,000 - $40,000, and $40,000 - $20,000, respectively), while option D results in a net income of $10,000 ($70,000 - $60,000), making it the different one.

Question 13

Match the following terms with the appropriate definition.
-Persons using accounting information who are not directly involved in running the organization.

Accepted Answer

External users are individuals and organizations outside a company who use its accounting information. This group includes investors, creditors, tax authorities, and regulatory agencies, among others, who are not directly involved in managing or operating the organization.

Question 14

The time period assumption:

Accepted Answer

The time period assumption presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods. This is necessary to help stakeholders analyze and evaluate the company's financial performance and position over time.

Question 15

The materiality constraint:

Accepted Answer

The materiality constraint prescribes that only information that would influence the decisions of a reasonable person need be disclosed. This means that companies do not need to disclose trivial or insignificant information in their financial statements.

Question 16

The full disclosure principle:

Accepted Answer

The full disclosure principle prescribes that a company report the details behind financial statements that would impact users' decisions. This means that companies must disclose any relevant information that could affect their financial statements and ultimately influence users' decision-making. Disclosure can take many forms, including footnotes, supplementary schedules, and accompanying narratives.

Question 17

Match the following terms with the appropriate definition.
-An information and measurement system that identifies,records and communicates relevant reliable and comparable information about an organization's business activities.

Accepted Answer

Accounting is the system that encompasses the process of identifying, recording, and communicating financial information about an organization to interested users.

Question 18

The going concern assumption:

Accepted Answer

The going concern assumption assumes that a business will continue operating instead of being closed or sold in the near future, which affects the way accounting information is prepared and presented. It is a fundamental principle of accounting.

Question 19

Which of the following combinations results in a net loss reported on the income statement?

Accepted Answer

Total revenues are less than total expenses in option B, resulting in a net loss. For all other options, total revenues exceed total expenses, resulting in a net profit.

Question 20

The business entity assumption:

Accepted Answer

The business entity assumption presumes that a business is accounted for separately from its owners and other business entities.

Quiz 1: Accounting in Business

Match the following terms with the appropriate definition. -Persons using accounting information who are directly involved in managing and operating the organization.

The monetary assumption:

Which of the following accounts is not included in the asset section of the balance sheet?

Match the following terms with the appropriate definition. -The part of accounting that involves recording transactions and events,either electronically or manually.

The expense recognition principle,also called the matching principle:

Which of the following accounts is not included in the liability section of the balance sheet?

The revenue recognition principle:

The measurement principle,also called the cost principle:

Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (or Dodd-Frank) to:

Which of the following accounts is not included in the asset section of the balance sheet?

Which of the following accounts is not included in the calculation of net income?

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Match the following terms with the appropriate definition. -Persons using accounting information who are not directly involved in running the organization.

The time period assumption:

The materiality constraint:

The full disclosure principle:

Match the following terms with the appropriate definition. -An information and measurement system that identifies,records and communicates relevant reliable and comparable information about an organization's business activities.

The going concern assumption:

Which of the following combinations results in a net loss reported on the income statement?

The business entity assumption: