Introduction to Business Exam Answer
Key
Course Introduction
Introduction to Business provides students with a broad overview of the key concepts, practices, and structures fundamental to the modern business environment. This course explores topics such as the basic functions of management, marketing, accounting, finance, entrepreneurship, and economics. Students will learn about business ownership types, organizational structures, business ethics, and the impact of globalization. The course is designed to give students a foundational understanding of how businesses operate and the critical thinking skills necessary to analyze real-world business situations and make informed decisions.
Recommended Textbook
Financial Accounting 13th Edition by Carl
S. Warren
Available Study Resources on Quizplus
17 Chapters
3045 Verified Questions
3045 Flashcards
Source URL: https://quizplus.com/study-set/3894
Page 2
Chapter 1: Introduction to Accounting and Business
Available Study Resources on Quizplus for this Chatper
186 Verified Questions
186 Flashcards
Source URL: https://quizplus.com/quiz/77537
Sample Questions
Q1) Which of the following group of companies are all examples of a merchandising business?
A) Delta Airlines, Marriott, Gap
B) Gap, Amazon, NIKE
C) GameStop, Sony, Dell
D) GameStop, Best Buy, Gap
Answer: D
Q2) Some of the major fraudulent acts by senior executives started as what they considered to be small ethical lapses which grew out of control.
A)True
B)False
Answer: True
Q3) An example of a general-purpose financial statement would be a report about projected price increases related to transportation costs.
A)True
B)False
Answer: False
Q4) What are the three sections of the Statement of Cash Flows?
Answer: Operating Activities, Investing Activities, and the Financing Activities
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Analyzing Transactions
Available Study Resources on Quizplus for this Chatper
225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/77538
Sample Questions
Q1) A chart of accounts is
A) the same as a balance sheet
B) usually a listing of accounts in alphabetical order
C) usually a listing of accounts in financial statement order
D) used in place of a ledger
Answer: C
Q2) Which of the following is not a correct rule of debits and credits?
A) assets, expenses and withdrawals are increased by debits
B) assets are decreased by credits and have a normal debit balance
C) liabilities, revenues and owner's equity are increased by credits
D) the normal balance for revenues and expenses is a credit
Answer: D
Q3) Accounts
A) do not reflect money amounts
B) are not used by entities that manufacture products
C) are records of increases and decreases in individual financial statement items
D) are only used by large entities with many transactions
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: The Adjusting Process
Available Study Resources on Quizplus for this Chatper
177 Verified Questions
177 Flashcards
Source URL: https://quizplus.com/quiz/77539
Sample Questions
Q1) On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.
Answer: $22,800/24 = $950
11ea8f91_7c8d_f817_b161_35f7946e9dee_TB2085_00_TB2085_00_TB2085_00
Q2) The company determines that the interest expense on a note payable for period ending December 31st is $775. This amount is payable on January 1st. Prepare the journal entries required on December 31st and January 1st.
Answer: 11ea8f91_7c8e_4640_b161_c753b5294ffd_TB2085_00_TB2085_00_TB2085_00
Q3) On March 1, a business paid $3,600 for a twelve month liability insurance policy. On April 1 the same business entered into a two-year rental contract for equipment at a total cost of $18,000. Determine the following amounts:
(a) insurance expense for the month of March
(b) prepaid insurance as of March 31
(c) equipment rent expense for the month of April
(d) prepaid equipment rental as of April 30
Answer: 11ea8f91_7c8e_1f2a_b161_216a79166f7f_TB2085_00_TB2085_00_TB2085_00
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Completing the Accounting Cycle
Available Study Resources on Quizplus for this Chatper
190 Verified Questions
190 Flashcards
Source URL: https://quizplus.com/quiz/77540
Sample Questions
Q1) The entry to close the appropriate insurance account at the end of the accounting period is
A) debit Income Summary; credit Prepaid Insurance
B) debit Prepaid Insurance; credit Income Summary
C) debit Insurance Expense; credit Income Summary
D) debit Income Summary; credit Insurance Expense
Q2) The income statement is prepared from the adjusted trial balance or the income statement columns on the work sheet.
A)True
B)False
Q3) After analyzing transactions, the next step would be to post the transactions in the ledger.
A)True
B)False
Q4) Which of the accounts below would be closed by posting a debit to the account?
A) Unearned Revenue
B) Fees Earned
C) Josh Morton, Drawing
D) Miscellaneous Expense
Q5) Describe a classified balance sheet.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Accounting Systems
Available Study Resources on Quizplus for this Chatper
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/77541
Sample Questions
Q1) Services provided on account is recorded in the revenue journal.
A)True
B)False
Q2) Briefly describe the three-step process of accounting system development.
Q3) One way to report revenue earned by a company is to present it by the different segments of business.
A)True
B)False
Q4) Which of the following is not one of the three phases needed when changing an accounting system, either in its entirety or in part?
A) analysis
B) design
C) review
D) implementation
Q5) The subsidiary ledger that includes customer account activity is called the A) asset ledger
B) accounts payable ledger
C) expense ledger
D) accounts receivable ledger
Q6) Describe and discuss e-commerce.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Accounting for Merchandising Businesses
Available Study Resources on Quizplus for this Chatper
214 Verified Questions
214 Flashcards
Source URL: https://quizplus.com/quiz/77542
Sample Questions
Q1) Merchandise Inventory normally has a debit balance.
A)True
B)False
Q2) Which of the following items would affect the cost of merchandise inventory acquired during the period?
A) quantity discounts
B) cash discounts
C) freight-in
D) all of these costs
Q3) Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a
A) debit to Cost of Merchandise Sold
B) credit to Accounts Payable
C) credit to Merchandise Inventory
D) credit to Sales
Q4) When the seller offers a sales discount, even if borrowing has to be done, it is generally advantageous for the buyer to pay within the discount period.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Inventories
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/77543
Sample Questions
Q1) Cost flow is in the order in which costs were incurred when using A) average cost
B) last-in, first-out
C) first-in, first-out
D) weighted average
Q2) During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.
A)True
B)False
Q3) Inventory turnover measures the length of time is takes to acquire, sell and replace the inventory.
A)True
B)False
Q4) The inventory costing method that reports the earliest costs in ending inventory is A) FIFO
B) LIFO
C) Average cost
D) Specific identification
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Sarbanes-Oxley, Internal Control, and Cash
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/77544
Sample Questions
Q1) Expenditures from a petty cash fund are documented by a petty cash receipt.
A)True
B)False
Q2) The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.
A)True
B)False
Q3) The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.
A)True
B)False
Q4) Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash.
A)True
B)False
Q5) Distinguish preventive controls from detective controls and give examples of each as they relate to cash.
Q6) List and define each of the five elements of internal control.
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Receivables
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/77545
Sample Questions
Q1) Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment), and bad debt expense is estimated at 4% of net credit sales. If net credit sales are $800,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is
A) $29,500
B) $34,500
C) $32,000
D) cannot be determined
Q2) Receivables that are expected to be collected in cash in eighteen months or less are reported in the Current Asset section of the balance sheet.
A)True
B)False
Q3) If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?
A) Uncollectible Accounts Expense
B) Accounts Receivable
C) Allowance for Doubtful Accounts
D) Interest Expense
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Fixed Assets and Intangible Assets
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/77546
Sample Questions
Q1) The transfer to expense of the cost of intangible assets attributed to the passage of time or decline in usefulness is called amortization.
A)True
B)False
Q2) The cost of computer equipment does include the consultant's fee to supervise installation of the equipment.
A)True
B)False
Q3) The journal entry for recording an operating lease payment would
A) be a memo entry only
B) debit the fixed asset and credit Cash
C) debit an expense and credit Cash
D) debit a liability and credit Cash
Q4) When minor errors occur in the estimates used in the determination of depreciation, the amounts recorded for depreciation expense in the past should be corrected.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Current Liabilities and Payroll
Available Study Resources on Quizplus for this Chatper
171 Verified Questions
171 Flashcards
Source URL: https://quizplus.com/quiz/77547
Sample Questions
Q1) The journal entry to record the cost of warranty repairs that were incurred during the current period, but related to sales made in prior years, includes a debit to Warranty Expense.
A)True
B)False
Q2) Which of the following taxes would be deducted in determining an employee's net pay?
A) FUTA taxes
B) SUTA taxes
C) FICA taxes
D) all of the above
Q3) Assuming a 360-day year, when a $40,000, 90-day, 9% interest-bearing note payable matures, total payment will amount to:
A) $40,900
B) $43,600
C) $900
D) $3,600
Q4) Medicare taxes are paid by both the employee and the employer.
A)True
B)False
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Accounting for Partnerships and Limited Liability Companies
Available Study Resources on Quizplus for this Chatper
188 Verified Questions
188 Flashcards
Source URL: https://quizplus.com/quiz/77548
Sample Questions
Q1) Xavier and Yolonda have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%, salary allowances of $27,000 and $18,000 respectively, and the remainder equally. How much of the net loss of $6,000 is allocated to Xavier?
A) $4,000
B) $1,000
C) $3,000
D) $6,000
Q2) When a new partner is admitted to a partnership, bonuses attributable to either the old partnership or to the incoming partner may be recognized in accordance with the agreement among the partners.
A)True
B)False
Q3) When a partner dies, the capital account balances of the remaining partners
A) will increase
B) will decrease
C) will remain the same
D) may increase, decrease, or remain the same
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/77549
Sample Questions
Q1) Which of the following is not classified as paid-in capital on the balance sheet?
A) common stock
B) common stock distributable
C) donated capital
D) treasury stock
Q2) Treasury Stock is listed in the stockholders' equity section on the balance sheet.
A)True
B)False
Q3) A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 4% stock dividend on a date when the market price was $12 a share. What is the amount transferred from the Retained Earnings account to Paid-in Capital accounts as a result of the stock dividend?
A) $12,800
B) $19,200
C) $32,000
D) $48,800
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Long-Term Liabilities: Bonds and Notes
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/77550
Sample Questions
Q1) An equal stream of periodic payments is called an annuity.
A)True
B)False
Q2) The amount of interest expense reported on the income statement will be more than the interest paid to bondholders if the bonds were originally sold at a discount.
A)True
B)False
Q3) If a company borrows money from a bank as an installment note, the interest portion of each annual payment will:
A) equal the interest rate on the note times the carrying amount of the note at the beginning of the period.
B) remain constant over the term of the note.
C) equal the interest rate on the note times the face amount.
D) increase over the term of the note.
Q4) When callable bonds are redeemed below carrying value
A) Gain on Redemption of Bonds is credited
B) Loss on Redemption of Bonds is debited
C) Retained Earnings is credited
D) Retained Earnings is debited
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Investments and Fair Value Accounting
Available Study Resources on Quizplus for this Chatper
129 Verified Questions
129 Flashcards
Source URL: https://quizplus.com/quiz/77551
Sample Questions
Q1) Compare and contrast why companies invest cash in short-term temporary investments vs. long-term investments.
Q2) If the proceeds from the sale of bond investments exceeds the carrying amount of the bonds, a gain is realized.
A)True
B)False
Q3) Purchased $400,000 of ABC Co. 5% bonds at 100 plus accrued interest of $4,500. Sold $250,000 of bonds at 97. The journal entry for the purchase would include:
A) a credit to Interest Receivable for $4,500
B) a credit to Interest Revenue for $4,500
C) a debit to Interest Receivable for $4,500
D) a debit to Interest Revenue for $4,500
Q4) It is not possible for one company to influence the operating policies of another company unless it owns more than 50% interest in that company.
A)True
B)False
Q5) (1) Discuss factors contributing to the trend to fair value accounting. (2) What are some of the disadvantages associated with using fair value?
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
154 Verified Questions
154 Flashcards
Source URL: https://quizplus.com/quiz/77552
Sample Questions
Q1) Free cash flow is
A) all cash in the bank
B) cash from operations
C) cash from financing, less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends
D) cash flow from operations, less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends
Q2) The statement of cash flows is an optional financial statement.
A)True
B)False
Q3) Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.
A)True B)False
Q4) Cash receipts from interest and dividends are classified as A) financing activities B) operating activities.
C) investing activities. D) either financing or investing activities.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/77553
Sample Questions
Q1) A balance sheet shows cash, $75,000; marketable securities, $115,000; receivables, $150,000 and $222,500 of inventories. Current liabilities are $225,000. The current ratio is 2.5 to 1.
A)True
B)False
Q2) The dividend yield rate is equal to the dividends per share divided by the par value per share of common stock.
A)True
B)False
Q3) In performing a vertical analysis, the base for cost of goods sold is
A) total selling expenses.
B) net sales.
C) total expenses.
D) gross profit.
Q4) Which of the following is not included in the computation of the quick ratio?
A) inventory
B) marketable securities
C) accounts receivable
D) cash
Q5) Define solvency and profitability. How are they alike?
Page 19
To view all questions and flashcards with answers, click on the resource link above.