CHAPTER 1 QUIZ ACCOUNTING 211 SPRING 21 1 Accounting is an information and measurement system that does all of the following except A Identifies business activities B Records business activities C Communicates business activities D Eliminates the need for interpreting financial data E Helps people make better decisions 2 External users of accounting information include all of the following except A Shareholders B Customers C Purchasing managers D Government regulators E Creditors 3 All of the following are true regarding ethics except A Ethics are beliefs that distinguish right from wrong B Ethics rules are often set for CPAs C Ethics do not directly affect the operations or outcome of a company D Are critical in accounting E Ethics can be difficult to apply 4 The private sector group that currently has the authority to establish generally accepted accounting principles in the United States is the A APB B FASB C AAA D AICPA E SEC 5 If a company is considering the purchase of a parcel of land that was acquired by the seller for 85 000 is offered for sale at 150 000 is assessed for tax purposes at 95 000 is recognized by the purchaser as easily being worth 140 000 and is purchased for 137 000 the land should be recorded in the purchaser s books at A 95 000 B 137 000 C 138 500 D 140 000 E 150 000 6 If the assets of a company increase by 55 000 during the year and its liabilities increase by 25 000 during the same year then the change in equity of the company during the year must have been A An increase of 80 000 B A decrease of 80 000 C An increase of 30 000 D A decrease of 30 000 E An increase of 25 000 7 The income statement reports all of the following except A Revenues earned by a business B Expenses incurred by a business C Assets owned by a business D Net income or loss earned by a business E The time period over which the earnings occurred 8 A balance sheet lists A The types and amounts of the revenues and expenses of a business B Only the information about what happened to equity during a time period C The types and amounts of assets liabilities and equity of a business as of a specific date D The inflows and outflows of cash during the period E The assets and liabilities of a company but not the stockholders equity 9 Chou Co has a net income of 43 000 assets at the beginning of the year are 250 000 and assets at the end of the year are 300 000 Compute its return on assets A 8 4 B 17 2 C 14 3 D 15 6 E 1 5 10 A company reported total equity of 145 000 at the beginning of the year The company reported 210 000 in revenues and 165 000 in expenses for the year There were no stockholder investments or dividends during the year Liabilities at the end of the year totaled 92 000 What are the total assets of the company at the end of the year A 45 000 B 92 000 C 98 000 D 210 000 E 282 000