An accounting information system communicates data to help businesses make better decisions.
True
False

Question 2 2 points Save
External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.
True
False

Question 3 2 points Save
External users include lenders, shareholders, customers, and regulators.
True
False

Question 4 2 points Save
The Sarbanes-Oxley Act (SOX) does not require public companies to apply both accounting oversight and stringent internal controls.
True
False

Question 5 2 points Save
A sole proprietorship is one or more individuals selling products or services for profit.
True
False

Question 6 2 points Save
Accounting information is communicated to various parties through financial statements.
True
False

Question 7 2 points Save
The business entity principle means that a business will continue operating for an indefinite period of time.
True
False

Question 8 2 points Save
As a general rule, revenues should not be recognized in the accounting records until it is received in cash.
True
False

Question 9 2 points Save
Understanding generally accepted accounting principles is not necessary to use and interpret financial statements.
True
False

Question 10 2 points Save
Objectivity means that financial information is supported by independent unbiased evidence.
True
False

Question 11 2 points Save
The idea that a business will continue to operate until it can sell its assets to pay its creditors underlies the going-concern assumption.
True
False

Question 12 2 points Save
The three common forms of business ownership include sole proprietorship, partnership, and non-profit.
True
False

Question 13 2 points Save
Expenses decrease equity and are the costs of assets or services used to earn revenues.
True
False

Question 14 2 points Save
Withdrawals by the owner are a business expense.
True
False

Question 15 2 points Save
An account balance is the difference between the debits and credits for an account including any beginning balance.
True
False

Question 16 2 points Save
In a double-entry accounting system, the total amount debited must always equal the total amount credited.
True
False

Question 17 2 points Save
Debits increase asset and expense accounts.
True
False

Question 18 2 points Save
A revenue account normally has a debit balance.
True
False

Question 19 2 points Save
A transaction that decreases an asset account and increases a liability account must also affect one or more other accounts.
True
False

Question 20 2 points Save
If insurance coverage for the next three years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.
True
False

Question 21 2 points Save
If a company purchases land paying cash, the journal entry to record this transaction will include a debit to Cash.
True
False

Question 22 2 points Save
When a company bills a customer for $600 for services rendered, the journal entry to record this transaction will include a $600 debit to Services Revenue.
True
False

Question 23 2 points Save
The higher a company’s debt ratio is, the higher the risk of a company not being able to meet its obligations.
True
False

Question 24 2 points Save
Hamilton Industries has liabilities of $105 million and total assets of $350 million. Its debt ratio is 40.0%.
True
False

Question 25 2 points Save
A compound journal entry affects no more than two accounts.
True
False

Question 26 2 points Save
A trial balance that balances is not proof of complete accuracy in recording transactions.
True
False

Question 27 2 points Save
Ethics:
Are beliefs that separate right from wrong.
And law often coincide.
Help to prevent conflicts of interest.
Are critical in accounting.
All of these.

Question 28 2 points Save
If a parcel of land that was originally acquired for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000, the land should be recorded in the purchaser’s books at:
$9

I don’t have time to answer all of them, but here’s a few:

4.2 False

8.2 False

10.2 True

14.2 False

16.2 True

18.2 False

One Response

1. capwest5a Says:
   February 20th, 2010 at 7:40 am

   I don’t have time to answer all of them, but here’s a few:

   4.2 False

   8.2 False

   10.2 True

   14.2 False

   16.2 True

   18.2 False
   References :

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