Homework1(Pleasechooseoneofbestanswerfromfouralternativesforallofthefollowingstatements.)1.Theprimaryobjectiveoffinancialreportingis.A.TopresentinformationinanethicalmannerB.Toprovideinformationtothefederalgov

Question

Homework 1
(Please choose one of best answer from four alternatives for all of the following statements.)
1.The primary objective of financial reporting is _______.
A.To present information in an ethical manner
B.To provide information to the federal government
C.To provide information useful for investment and lending decisions
D.To provide information useful to managers in making daily decisions
2.Which of the following statements is true?
A.Revenues are assets because they represent economic benefits
B.Assets are economic resources that are expected to benefit future periods
C.The accounting equation can be stated as Assets + Liabilities + Owner’s Equity
D.Liabilities are economic obligations to insiders
3.If assets increase $80,000 during the period and owners’ equity decreases $16,000 during the period,liabilities must have ______.
A.increased $64,000
B.increased $96,000
C.decreased $64,000
D.decreased $96,000
4.Which of these statements is false?
A.Increases in assets and increases in revenues are recorded with a debit.
B.Increases in liabilities and increases in owner’s equity are recorded with a credit.
C.Increases in both assets and increases in expenses are recorded with a debit.
D.Decreases in liabilities and increases in expenses are recorded with a debit.
5.Which of these accounts has a normal debit balance?
A.Rent Expense
B.Withdrawals
C.Service Revenue
D.Both A and B have a normal debit balance
6.Which of the following statements is correct?
A.The chart of accounts is a list of all accounts with their balances
B.The trial balance is a list of all accounts with their balances,divided as debit or credit
C.The ledger is maintained in chart-of-accounts order
D.Both B and C are correct
7.During 20x4,Bustamante Co.incurred salary expense of $240,000.Beginning and ending Salary Payable was $4,000 and $8,000,respectively.In 20x4,Bustamante paid salaries of ______.
A.$248,000
B.$240,000
C.$236,000
D.$244,000
8.Recording an expense when it is paid instead of when incurred is a violation of ______.
A.The matching principle
B.The time period concept
C.The reliability concept
D.The revenue principle
9.On July 31,$3,600 is paid for a one-year insurance policy.On December 31,the adjusting entry for prepaid insurance would include ______.
A.A debit to Insurance Expense,$3,600
B.A credit to Prepaid Insurance,$3,600
C.A debit to Insurance expense,$1,500
D.A credit to Prepaid Insurance,$2,100
10.The 20x3 income statement showed Rent Expense of $6,100.The related balance sheet account,Prepaid Rent,had a beginning balance of $1,400 and an ending balance of $1,200.The amount of cash paid for rent during 20x3 is _____.
A.$6,100
B.$1,200
C.$6,300
D.$5,900

Answer 1

1.The primary objective of financial reporting is
C.To provide information useful for investment and lending decisions
2.Which of the following statements is true?
B.Assets are economic resources that are expected to benefit future periods
3.If assets increase $80,000 during the period and owners’ equity decreases $16,000 during the period,liabilities must have ______.
A.increased $64,000
4.Which of these statements is false?
A.Increases in assets and increases in revenues are recorded with a debit.
5.Which of these accounts has a normal debit balance?
D.Both A and B have a normal debit balance
6.Which of the following statements is correct?
D.Both B and C are correct
7.During 20x4,Bustamante Co.incurred salary expense of $240,000.Beginning and ending Salary Payable was $4,000 and $8,000,respectively.In 20x4,Bustamante paid salaries of ______.
C.$236,000
8.Recording an expense when it is paid instead of when incurred is a violation of ______.
A.The matching principle
9.On July 31,$3,600 is paid for a one-year insurance policy.On December 31,the adjusting entry for prepaid insurance would include ______.
C.A debit to Insurance expense,$1,500
10.The 20x3 income statement showed Rent Expense of $6,100.The related balance sheet account,Prepaid Rent,had a beginning balance of $1,400 and an ending balance of $1,200.The amount of cash paid for rent during 20x3 is _____.
C.$6,300