1. Generally accepted accounting principles areA. income tax regulations of the Internal Revenue Service.B. standards that indicate how to report economic events.C. theories that are based on physical laws of the universe.D. principles that have been proven correct by academic researchers.2. The Duality Principle requires thatA. all financial data must be recorded at the time when the transaction occurs.B. all transaction occurred have at least two effects on the financial statements.C. all expenses incurred during generation of revenue must be matched properly.D. only transaction data that can be expressed in terms of money will be recorded.3. The ACE Company has five plants nationwide that cost $100 million. The current marketvalue of the plants is $500 million. The plants will be recorded and reported as assets atA. $100 million.B. $600 million.C. $400 million.D. $500 million.4. Which of the following is not an advantage of the corporate form of business organization?A. Limited liability of stockholders.B. Transferability of ownership.C. Unlimited personal liability for stockholders.D. Unlimited life.5. Internal users of accounting information include all of the following exceptA. company officers.B. investors.C. marketing managers.D. production supervisors. 6. Owner's equity can be described asA. creditorship claim on total assets.B. ownership claim on total assets.C. benefactor's claim on total assets.D. debtor claim on total assets7. If total liabilities increased by $15,000 and owner's equity increased by $5,000 during aperiod of time, then total assets must change by what amount and direction during that sameperiod?A. $20,000 decrease.B. $20,000 increase.C. $25,000 increase.D. $10,000 increase.8. Which one of the following represents the expanded basic accounting equation?A. Assets = Liabilities + Owner's Capital + Owner's Drawings – Revenue – Expenses.B. Assets + Owner's Drawings + Expenses = Liabilities + Owner's Capital + Revenues.C. Assets – Liabilities – Owner's Drawings = Owner's Capital+Revenues – Expenses.D. Assets = Revenues + Expenses – Liabilities.9. Bright Eyes Restaurant received a bill of $600 from the Ronand Advertising Agency. Theowner is postponing payment of the bill until a later date. The effect on specific items in thebasic accounting equation isA. a decrease in Cash and an increase in Accounts Payable.B. a decrease in Cash and an increase in Owner's Capital.C. an increase in Accounts Payable and a decrease in Owner's Capital.D. a decrease in Accounts Payable and an increase in Owner's Capital.10. If the owner's equity account increases from the beginning of the year to the end of the year,thenA. net income is less than owner drawings.B. a net loss is less than owner drawings.C. additional owner investments are less than net losses.D. net income is greater than owner drawings.11. Sufjan Stevens began the Sufjan Company by investing $25,000 of cash in the business. Thecompany recorded revenues of $185,000, expenses of $140,000, and had owner drawings of$10,000. What was Sufjan's net income for the year?A. $35,000.B. $45,000.C. $55,000.D. $60,000.

Generally Accepted Accounting Principles are group of accounting standards that are used to…

1. Generally accepted accounting principles are A. income tax regulations of the Internal Revenue Service. B. standards that indicate how to report economic events. C. theories that are based on physical laws of the universe. D. principles that have been proven correct by academic researchers. 2. The Duality Principle requires that A. all financial data must be recorded at the time when the transaction occurs. B. all transaction occurred have at least two effects on the financial statements. C. all expenses incurred during generation of revenue must be matched properly. D. only transaction data that can be expressed in terms of money will be recorded. 3. The ACE Company has five plants nationwide that cost $100 million. The current market value of the plants is $500 million. The plants will be recorded and reported as assets at A. $100 million. B. $600 million. C. $400 million. D. $500 million. 4. Which of the following is not an advantage of the corporate form of business organization? A. Limited liability of stockholders. B. Transferability of ownership. C. Unlimited personal liability for stockholders. D. Unlimited life. 5. Internal users of accounting information include all of the following except A. company officers. B. investors. C. marketing managers. D. production supervisors.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q