Communication consists of keeping a systematic, chronological diary of events, measured in dollars and cents.

ANSWER: FALSE Financial accounting provides internal reports to help users make decisions about their companies. ANSWER: FALSE The first step in analyzing ethics cases is to recognize an ethical situation and the ethical issues involved. ANSWER: TRUE The cost principle dictates that companies record assets at their cost. ANSWER: TRUE The economic entity assumption applies to corporations but not proprietorships or partnerships. ANSWER: FALSE Expenses are decreases in stockholders' equity that result from operating the business. ANSWER: TRUE The receipt of cash on account will increase total assets. ANSWER: FALSE A balance sheet is prepared as of a specific date. ANSWER: TRUE The statement of cash flows provides information on the cash receipts and payments for a specific period of time. ANSWER: TRUE Cost accounting is an activity in public accounting. ANSWER: FALSE The first activity of the accounting process is ANSWER: identification. Keeping a systematic, chronological diary of events, measured in dollars and cents is called: ANSWER: recording. Internal users of accounting information include all of the following except: ANSWER: investors. Bookkeeping, as opposed to accounting, usually involves only: ANSWER: recording. Ethics are the standards of conduct by which one's actions are judged as: ANSWER: right or wrong. honest or dishonest. fair or not fair. All of these options.

The primary accounting standard-setting body in the United States is the: ANSWER: Financial Accounting Standards Board. Combining the activities of Kellogg and General Mills would violate the: ANSWER: economic entity assumption. A business organized as a separate legal entity under state corporation law having ownership divided into transferable shares of stock is a: ANSWER: corporation. The resources a business owns are called: ANSWER: assets. Net income results when: ANSWER: revenues exceed expenses. An example of an internal transaction is the: ANSWER: use of office supplies. The investment of cash by stockholders: ANSWER: increases stockholders' equity. Revenues and expenses are reported on the: ANSWER: INCOME STATEMENT The ending retained earnings amount is shown on the: ANSWER: both the balance sheet and the retained earnings statement. Which of the following financial statements is prepared as of a specific date? ANSWER: Balance sheet Which of the following is not one of the career opportunities in accounting? ANSWER: Personal accounting At the beginning of the year, Cymbal Company had total assets of $700,000 and total liabilities of $400,000. If the total assets increased $100,000 and the total liabilities decreased $80,000, what is the amount of stockholders' equity at the end of the year? ANSWER: $480,000 Peterson Company reported stockholders' equity of $75,000 at the beginning of the year. During the year, the company recognized net income of $15,000. The stockholders made an additional investment of $10,000 at midyear and paid a $5,000 dividend at year-end. What is the total amount of stockholders' equity at the end of the year? ANSWER: $95,000 Simeon Company had the following summarized operations for the month of May: Revenues earned: for cash, $32,000; and an additional $18,000 on account; and Expenses incurred: for cash, $5,000; and on account, an additional $10,000. In addition, the company purchased Equipment for $8,000 on account and Supplies for $5,000 for cash. The net income for the month of May is ANSWER: $35,000.

Miley has the following year-end account balances: Accounts Receivable, $5,000; Supplies, $12,000; Equipment, $18,000; Accounts Payable, $17,000; Common Stock, $43,000. The Cash account balance was not available at year-end. Given the account balances listed, the balance in the Cash account should be ANSWER: $25,000. ____________ accounting uses accounting, auditing, and investigative skills to conduct investigations into theft and fraud. ANSWER: Forensic