1 Accounting guidelines are formulated by A the

1) Accounting guidelines are formulated by: A) the Securities and Exchange Commission B) the Financial Accounting Standards Board C) the American Accounting Association D) the American Institute of Certified Public Accountants 2) According to the FASB, the primary objective of financial reporting is to provide information: A) to the Securities and Exchange Commission B) useful for making investing and lending decisions C) regarding the assets and liabilities of a business D) regarding the revenues and expenses of a business

3) GAAP stands for: A) generally accepted accounting principles B) generally accepted auditing practices C) generally accrued auditing procedures D) generally accrued accounting principles 4) The accounting equation can be stated as: A) Liabilities = Revenue + Owner's Equity B) Owner's Equity = Assets + Liabilities C) Assets - Liabilities = Owner's Equity D) Expenses = Liabilities - Owner's Equity

5) If total liabilities are $200, 000 and total assets are $325, 000, owner's equity would be: A) $525, 000 B) $200, 000 C) $125, 000 D) impossible to determine from the given data

Work On: • Show me your Notes • Finish & turn in “old” assignments • Assignment: • Short Exercises through #9 – All short exercises by Friday

6) A cash investment into the business by the owner would: A) increase assets and increase owner's equity B) increase assets and decrease owner's equity C) increase assets and decrease liabilities D) decrease assets and increase liabilities 7) Purchasing supplies on account would: A) have no effect on the accounting equation B) increase total assets and increase liabilities C) decrease total assets and decrease owner's equity D) decrease liabilities and decrease total assets

8) Which of the following transactions would both increase and decrease an asset: A) purchasing office supplies for cash B) purchasing land by issuing a note payable C) performing a service and receiving the cash immediately D) borrowing money from a bank 9) The financial statement that presents a summary of the assets, liabilities, and owner's equity as of a specific date is the A) balance sheet B) statement of assets C) statement of owner's equity D) statement of cash flows 10) The statement which presents a summary of a company's revenues and expenses is called: A) the statement of cash flows B) the balance sheet C) the income statement D) the statement of financial position