Gb518 Unit 1 Exam

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1.| Question :| An example of a financing activity is:|
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| Student Answer:| | Buying office supplies |
| | | Obtaining a long-term loan |
| | | Buying office equipment |
| | | Selling inventory |
| | | Buying land |
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2.| Question :| The principle that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash and (3) measures the amount of revenue as the cash plus the cash equivalent value of any non-cash assets received from customers in exchange for goods or services is called the:|

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| Student Answer:| | Going-concern principle |
| | | Cost principle |
| | | Revenue recognition principle |
| | | Objectivity principle |
| | | Business entity principle |
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3.| Question :| Risk is:|
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| Student Answer:| | Net income divided by average total assets | | | | The reward for investment |
| | | The uncertainty about the expected return that will be earned from an investment | | | | Unrelated to expected return |
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4.| Question :| Which of the following elements are found on the Balance Sheet?|
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| Student Answer:| | Service Revenue |
| | | Net Income |
| | | Operating Activities |
| | | Utilities Expense |
| | | Retained Earnings |
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5.| Question :| A credit is used to record:|
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| Student Answer:| | An increase in an expense account | | | | An increase in an asset account |
| | | An increase in an unearned revenue account |
| | | A decrease in a revenue account |
| | | A decrease to retained earnings |
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6.| Question :| The debt ratio is used:|
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| Student Answer:| | To measure the amount of equity relative to the expenses | | | | To reflect the risk associated with a company's debts | | | | Only by banks when a business applies for a loan | | | | To determine how much debt a firm should pay off | | | | To determine who a company owes |

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7.| Question :| Assets created by selling goods and services on credit are:|
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| Student Answer:| | Accounts payable |
| | | Accounts receivable |
| | | Liabilities |
| | | Expenses |
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8.| Question :| Creditors' claims on the assets of a company are called:|
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| Student Answer:| | Net losses |
| | | Expenses |
| | | Revenues |
| | | Equity |
| | | Liabilities |
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9.| Question :| Net Income:|
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| Student Answer:| | Decreases equity |
| | | Represents the amount of assets owners put into a business | | | | Equals assets minus liabilities |
| | | Is the excess of revenues over expenses |
| | | Represents the owners' claims against assets |
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10.| Question :| A debit is:|
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| Student Answer:| | An increase in an account |
| | | The right-hand side of a T-account |
| | | A decrease in an account |
| | | The left-hand side of a T-account |
| | | An increase to a liability account |
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11.| Question :| Generally Accepted Accounting Principles:|
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| Student Answer:| | Focus on the review of a situation | | | | Does not require financial statements |
| | | Never change |
| | | Intend to make information on the financial statements relevant, reliable and comparable | | | | Oversees Security and Exchange Commission |
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12.| Question :| Distributions of assets by a business to its stockholders are called:|
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| Student Answer:| | Dividends |
| | | Expenses |
| | | Assets |
| | | Retained earnings |
| | | Net Income |
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13.| Question :| Internal users of accounting information include:|
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| Student Answer:|...
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