Gb518 Unit 1 Exam
1. | Question : | An example of a financing activity is: | | | Student Answer: | | Buying office supplies | | | | Obtaining a long-term loan | | | | Buying office equipment | | | | Selling inventory | | | | Buying land | | | |
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: | | | Student Answer: | | Going-concern principle | | | | Cost principle | | | | Revenue recognition principle | | | | Objectivity principle | | | | Business entity principle | | | |
3. | Question : | Risk is: | | | 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 | | | |
4. | Question : | Which of the following elements are found on the Balance Sheet? | | | Student Answer: | | Service Revenue | | | | Net Income | | | | Operating Activities | | | | Utilities Expense | | | | Retained Earnings | | | |
5. | Question : | A credit is used to record: | | | 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 | | |
6. | Question : | The debt ratio is used: | | | 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
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: | | | Student Answer: | | Going-concern principle | | | | Cost principle | | | | Revenue recognition principle | | | | Objectivity principle | | | | Business entity principle | | | |
3. | Question : | Risk is: | | | 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 | | | |
4. | Question : | Which of the following elements are found on the Balance Sheet? | | | Student Answer: | | Service Revenue | | | | Net Income | | | | Operating Activities | | | | Utilities Expense | | | | Retained Earnings | | | |
5. | Question : | A credit is used to record: | | | 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 | | |
6. | Question : | The debt ratio is used: | | | 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