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ACG 2021 Midterm Exam Questions and Correct Answers
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  • Course
  • ACG 2021
  • Institution
  • ACG 2021

Accounting is the information system that A. measures business activity. B. communicates the results to decision makers. C. processes information into reports. D. All of the above all of the above Which of the following is not an external user of a business's financial information? A. Taxing autho...

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  • August 11, 2024
  • 18
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • acg 2021 midterm exam questions and correct answer
  • accounting is the information system that
  • communicates the results to decision makers

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  • ACG 2021
  • ACG 2021

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ACG 2021 Midterm Exam Questions and
Correct Answers
Accounting is the information system that
A.
measures business activity.
B.
communicates the results to decision makers.
C.
processes information into reports.
D.
All of the above ✅all of the above

Which of the following is not an external user of a business's financial information?
A.
Taxing authorities
B.
Customers
C.
Employee
D.
Investors ✅employee

Generally Accepted Accounting Principles (GAAP) are currently formulated by the
A.
Financial Accounting Standards Board (FASB).
B.
Securities and Exchange Commission (SEC).
C.
Institute of Management Accountants (IMA).
D.
American Institute of Certified Public Accountants (AICPA). ✅Financial Accounting
Standards Board (FASB).

Which type of business organization is owned by only one owner?
A.
Corporation
B.
Partnership
C.
Sole proprietorship
D.
Items a, b, and c are all correct. ✅Sole proprietorship

,Which of the following characteristics best describes a corporation?
A.
A business with a single owner
B.
Is not taxed
C.
Stockholders not personally liable for entity's debts
D.
Not a separate taxable entity ✅Stockholders not personally liable for entity's debts

Which of the following requires accounting information to be complete, neutral, and free
from material error?
A.
Faithful representation concept
B.
Cost principle
C.
Economic entity assumption
D.
Going concern assumption ✅Faithful representation concept

At the end of a recent year, Global Cleaning Service, a full-service house and office
cleaning service, had total assets of $ 3,630 and equity of $ 2,280. How much were
Global Cleaning Service's liabilities? ✅1350

Consider the overall effects on Global Cleaning Service from selling and performing
services on account for $ 6,400 and paying expenses totaling $ 2,500. What is Global
Cleaning Service's net income or net loss? ✅net income of 3900

The balance sheet reports the
A.
financial position on a specific date.
B.
results of operations on a specific date.
C.
financial position for a specific period.
D.
results of operations for a specific period. ✅financial position on a specific date.

wishes to organize her business with unlimited life and wants owners of the business to
not be held personally liable for the business's debts. Additionally, Chloe wants the
business to be a separate taxable entity. Which type of business organization will meet
Chloe's needs best? ✅corporation

, a. Michael's personal assets are not recorded on the company's balance sheet: ✅the
economic entity assumption.

b. The company records furniture at its cost of $9,000, not its market value of $13,000:
✅the cost principle

c. The company records its financial statements in U.S. dollars: ✅monetary unit
assumption

d. Michael expects the company to remain in operations for the foreseeable future:
✅going concern assumption

assets equation ✅assets= liabilities+equity

Liabilities: (NATU) ✅accounts payable
notes payable
taxes payable
unearned revenue

Assets: ✅cash
accounts/expense receivable
office supplies
land
prepaid expense/insurance
furniture, equipment

Equity: ✅common stock
service revenue
dividends
rent expense
salaries expense
rent revenue

what is on the Income Statement? ✅rent expense
service revenue
salaries expense

what is on the Statement of Retained Earnings? ✅dividends

what is on the Balance Sheet? ✅accounts payable
cash
common stock
accounts receivable
office supplies
land

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