Podcast
Questions and Answers
True or false: Accounting consists of three basic activities - identification, recording, and communication.
True or false: Accounting consists of three basic activities - identification, recording, and communication.
True
True or false: Bookkeeping encompasses all steps in the accounting process.
True or false: Bookkeeping encompasses all steps in the accounting process.
False
True or false: Accountants prepare, but do not interpret, financial reports.
True or false: Accountants prepare, but do not interpret, financial reports.
False
True or false: The two most common types of external users are investors and company officers.
True or false: The two most common types of external users are investors and company officers.
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True or false: Total assets must equal total liabilities and owner's equity.
True or false: Total assets must equal total liabilities and owner's equity.
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True or false: The statement of cash flows provides information on the cash receipts and payments for a specific period of time.
True or false: The statement of cash flows provides information on the cash receipts and payments for a specific period of time.
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True or false: The balance sheet is prepared as of a specific date.
True or false: The balance sheet is prepared as of a specific date.
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True or false: The net income reported for December 2017 can be determined from the given information.
True or false: The net income reported for December 2017 can be determined from the given information.
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True or false: The Sarbanes-Oxley Act was passed to reduce unethical behavior in corporate accounting and prevent future scandals?
True or false: The Sarbanes-Oxley Act was passed to reduce unethical behavior in corporate accounting and prevent future scandals?
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True or false: The primary accounting standard-setting body in the United States is the Financial Accounting Standards Board (FASB)?
True or false: The primary accounting standard-setting body in the United States is the Financial Accounting Standards Board (FASB)?
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True or false: The historical cost principle requires companies to record assets at their fair value?
True or false: The historical cost principle requires companies to record assets at their fair value?
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True or false: According to the economic entity assumption, a business owner's personal expenses must be separated from the expenses of the business?
True or false: According to the economic entity assumption, a business owner's personal expenses must be separated from the expenses of the business?
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True or false: The owner invested $25,000 cash in the business.
True or false: The owner invested $25,000 cash in the business.
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True or false: The company purchased $7,000 of office equipment on credit.
True or false: The company purchased $7,000 of office equipment on credit.
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True or false: The company received $8,000 cash in exchange for services performed.
True or false: The company received $8,000 cash in exchange for services performed.
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True or false: The company paid $850 for this month’s rent.
True or false: The company paid $850 for this month’s rent.
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True or false: If a business is liquidated, claims of creditors must be paid before ownership claims.
True or false: If a business is liquidated, claims of creditors must be paid before ownership claims.
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True or false: The basic accounting equation is Assets = Liabilities + Owner's Equity.
True or false: The basic accounting equation is Assets = Liabilities + Owner's Equity.
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True or false: Expenses are the cost of assets consumed or services used in the process of earning revenue.
True or false: Expenses are the cost of assets consumed or services used in the process of earning revenue.
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True or false: The transaction of Softbyte Inc. receiving $1,200 cash from customers for app development services will result in an increase in assets and owner's equity.
True or false: The transaction of Softbyte Inc. receiving $1,200 cash from customers for app development services will result in an increase in assets and owner's equity.
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True or false: Softbyte Inc. pays $250 in cash to the Daily News for advertising on its online website.
True or false: Softbyte Inc. pays $250 in cash to the Daily News for advertising on its online website.
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True or false: Softbyte Inc. receives $1,500 in cash from customers for services performed and bills the remaining balance of $2,000 on account.
True or false: Softbyte Inc. receives $1,500 in cash from customers for services performed and bills the remaining balance of $2,000 on account.
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True or false: Softbyte Inc. pays $600 in cash for office rent, $900 for salaries and wages of employees, and $200 for utilities.
True or false: Softbyte Inc. pays $600 in cash for office rent, $900 for salaries and wages of employees, and $200 for utilities.
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True or false: Softbyte Inc. pays $250 in cash to the Daily News, reducing the accounts payable recorded in Transaction 5.
True or false: Softbyte Inc. pays $250 in cash to the Daily News, reducing the accounts payable recorded in Transaction 5.
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IFRS tends to be more principles-based and GAAP tends to be more rules-based.
IFRS tends to be more principles-based and GAAP tends to be more rules-based.
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The internal control standards applicable to Sarbanes-Oxley (SOX) apply to all companies, regardless of size or listing status.
The internal control standards applicable to Sarbanes-Oxley (SOX) apply to all companies, regardless of size or listing status.
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There is ongoing debate about whether non-U.S. companies should have to comply with the additional regulations imposed by Sarbanes-Oxley (SOX).
There is ongoing debate about whether non-U.S. companies should have to comply with the additional regulations imposed by Sarbanes-Oxley (SOX).
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Both the IASB and the FASB are working towards eliminating major differences in the way certain transactions are accounted for and reported.
Both the IASB and the FASB are working towards eliminating major differences in the way certain transactions are accounted for and reported.
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A single set of high-quality international accounting standards would not have any benefits for mergers and acquisition activity.
A single set of high-quality international accounting standards would not have any benefits for mergers and acquisition activity.
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A single set of high-quality international accounting standards would not benefit financial markets.
A single set of high-quality international accounting standards would not benefit financial markets.
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