KETE201_Chapter 1

Front

Which accounting principle requires that all goods and services purchased be recorded at cost?

Back

Historical cost principle

Front

Resources owned or controlled by a company that are expected to yield future benefits are: Assets, Revenues, Liabilities, Owner's Equity

Back

Assets

Front

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

Back

$492,000

Front

Accounting

Back

Is an information and measurement system; Identifies, records, and communicates information about business activities; Involves interpreting information and designing information systems to provide useful reports that monitor and control a company's activities

Front

Which of the following statements is true about assets?

Back

All of these

Front

Which accounting principle requires that financial statements be prepared under the assumption that the business will continue to operate indefinitely?

Back

Going-concern principle

Front

What is the primary purpose of a balance sheet?

Back

To provide a snapshot of a company's financial position at a specific point in time

Front

Which of the following is considered a liability? Common stock, Accounts payable, Retained earnings, Inventory

Back

Accounts payable

Front

On June 30 of the current year, the assets and liabilities of Phoenix Phildell are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year? 

Back

$31,100

Front

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

Back

Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect