Multiple Choice Questions

 95. Accounting is an information and measurement system that: 

A. Identifies business activities.
B. Records business activities.
C. Communicates business activities.
D. Helps people make better decisions.
E. All of these.
96. Technology 
A. Has replaced accounting.
B. Has not changed the work that accountants do.
C. Has closely linked accounting with consulting, planning, and other financial services.
D. In accounting has replaced the need for decision makers.
E. In accounting is only available to large corporations.
97. The primary objective of financial accounting is: 
A. To serve the decision-making needs of internal users.
B. To provide financial statements to help external users analyze an organization's activities.
C. To monitor and control company activities.
D. To provide information on both the costs and benefits of looking after products and
services.
E. To know what, when, and how much to produce.
98. Internal users of accounting information include: 
A. Shareholders.
B. Managers.
C. Lenders.
D. Suppliers.
E. Customers.
99. The area of accounting aimed at serving the decision making needs of internal users is: 
A. Financial accounting.
B. Managerial accounting.
C. External auditing.
D. SEC reporting.
E. Bookkeeping.
100. The operating functions of a business include: 
A. Research and development.
B. Purchasing.
C. Marketing.
D. Distribution.
E. All of these.
101. External users of accounting information include: 
A. Shareholders.
B. Customers.
C. Creditors.
D. Government regulators.
E. All of these.
102. Career opportunities in accounting include: 
A. Auditing.
B. Management consulting.
C. Tax accounting.
D. Cost accounting.
E. All of these.
 103. Career opportunities in accounting include: 
A. Budgeting.
B. Auditing.
C. Cost accounting.
D. Internal Auditing.
E. All of these.
104. Accounting certifications include the: 
A. Certified Public Accountant.
B. Certified Management Accountant.
C. Certified Internal Auditor.
D. Personal Financial Specialist
E. All of these.
 105. A Certified Public Accountant 
A. Must meet education and experience requirements
B. Must pass an examination
C. Must exhibit ethical character
D. May also be a Certified Management Accountant.
E. All of these.
106. Ethical behavior requires: 
A. That auditors' pay not depend on the figures in the client's reports.
B. Auditors to invest in businesses they audit.
C. Analysts to report information favorable to their companies.
D. Managers to use accounting information to benefit themselves.
E. All of these.
107. Social responsibility: 
A. Is a concern for the impact of our actions on society.
B. Is a code that helps in dealing with confidential information.
C. Is required by the SEC.
D. Requires that all businesses conduct social audits.
E. All of these.
108. Ethics: 
A. Are beliefs that separate right from wrong.
B. And law often coincide.
C. Help to prevent conflicts of interest.
D. Are critical in accounting.
E. All of these.
109. The accounting guideline that requires financial statement information to be supported
by independent, unbiased evidence other than someone's belief or opinion is the: 
A. Business entity principle.
B. Monetary unit principle.
C. Going-concern principle.
D. Cost principle.
E. Objectivity principle.
110. Businesses can take the following form(s): 
A. Sole proprietorship.
B. Common stock.
C. Partnership.
D. A and C only.
E. All of these.
 111. A corporation: 
A. Is a business legally separate from its owners.
B. Is controlled by the FASB.
C. Has shareholders who have unlimited liability for the acts of the corporation.
D. Is the same as a limited liability partnership.
E. All of these.
112. The rules adopted by the accounting profession as guides in preparing financial
statements are: 
A. Comprised of both general and specific principles.
B. Known as generally accepted accounting principles.
C. Abbreviated as GAAP.
D. Intended to make information in financial statements relevant, reliable, and comparable.
E. All of these.
 113. The committee that attempts to create more harmony among the accounting practices of
different countries by identifying preferred practices and encouraging their worldwide
acceptance is the: 
A. AICPA.
B. FASB.
C. CAP.
D. SEC.
E. IASB.
 114. The private group that currently has the authority to establish generally accepted
accounting principles is the: 
A. APB.
B. FASB.
C. AAA.
D. AICPA.
E. SEC.
 115. The accounting assumption that requires every business to be accounted for separately
from other business entities, including its owner or owners is known as the: 
A. Objectivity principle.
B. Business entity assumption.
C. Going-concern assumption.
D. Revenue recognition principle.
E. Cost principle.
 116. The rule that requires financial statements to reflect the assumption that the business
will continue operating instead of being closed or sold, unless evidence shows that it will not
continue, is the: 
A. Going-concern principle.
B. Business entity principle.
C. Objectivity principle.
D. Cost Principle.
E. Monetary unit principle.
117. Rules adopted by the accounting profession as guides in measuring, recording, and
reporting the financial condition and activities of a business: 
A. Are comprised of both general and specific principles.
B. Are known as generally accepted accounting principles.
C. Are abbreviated as GAAP.
D. Arise from both long-used practices and from rulings of authoritative groups.
E. All of these.
118. If a parcel of land that was originally acquired for $85,000 is offered for sale at
$150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily
being worth $140,000, and is sold for $137,000, the land should be recorded in the
purchaser's books at: 
A. $95,000.
B. $137,000.
C. $138,500.
D. $140,000.
E. $150,000.
119. To include the personal assets and transactions of a business's owner in the records and
reports of the business would be in conflict with the: 
A. Objectivity principle.
B. Realization principle.
C. Business entity principle.
D. Going-concern principle.
E. Revenue recognition principle.
 120. The accounting principle that requires accounting information to be based on actual cost
and requires assets and services to be recorded initially at the cash or cash-equivalent amount
given in exchange, is the: 
A. Accounting equation.
B. Cost principle.
C. Going-concern principle.
D. Realization principle.
E. Business entity principle.
 121. Generally accepted accounting principles: 
A. Are based on long used accounting practices.
B. Are basic assumptions, concepts, and guidelines in preparing financial statements.
C. Are detailed rules used in reporting on business transactions and events.
D. Arise from the rulings of authoritative bodies.
E. All of these.
122. The objectivity principle: 
A. Means that information is supported by independent, unbiased evidence.
B. Means that information can be based on what the preparer thinks is true.
C. Means that financial statements should contain information that is optimistic.
D. Means that a business may not reorganize revenue until cash is received.
E. All of these.
123. The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the
inflow of assets associated with revenue to be in a form other than cash, and (3) measures the
amount of revenue as the cash plus the cash equivalent value of any noncash assets received
from customers in exchange for goods or services, is called the: 
A. Going-concern principle.
B. Cost principle.
C. Revenue recognition principle.
D. Objectivity principle.
E. Business entity principle
124. The question of when revenue should be recognized on the income statement (according
to GAAP) is addressed by the: 
A. Revenue recognition principle.
B. Going-concern principle.
C. Objectivity principle.
D. Business entity principle.
E. Cost principle.
125. The International Accounting Standards Board (IASB) 
A. Hopes to create harmony among accounting practices of different countries
B. Is the government group that establishes reporting requirements for companies that issue
stock to the public.
C. Has the authority to impose its standards on companies.
D. Is the only source of generally accepted accounting principles (GAAP).
E. Only applies to companies that are members of the European Union.
 126. The Maximum Experience Company acquired a building for $500,000. Maximum
Experience had the building appraised, and found that the building was easily worth
$575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting
principle would require Maximum Experience to record the building on its records at
$500,000? 
A. Monetary unit principle
B. Going-concern principle
C. Cost principle
D. Business entity principle
E. Revenue recognition principle
 127. On December 15, 2007, Myers Legal Services signed a $50,000 contract with a client to
provide legal services to the client in 2008. Which accounting principle would require Myers
Legal Services to record the legal fees revenue in 2008 and not 2007? 
A. Monetary unit principle
B. Going-concern principle
C. Cost principle
D. Business entity principle
E. Revenue recognition principle
128. Marian Mosely is the owner of Mosely Accounting Services. Which accounting
principle requires Marian to keep her personal financial information separate from the
financial information of Mosely Accounting Services? 
A. Monetary unit principle
B. Going-concern principle
C. Cost principle
D. Business entity principle
E. None of these. Since Marian is a sole proprietor, she is not required to separate her
personal financial information from the financial information of Mosely Accounting
Services.
 129. A limited partnership: 
A. Includes a general partner with unlimited liability.
B. Is subject to double taxation.
C. Has owners called stockholders.
D. Is the same as a corporation.
E. May only have two partners.
 130. A partnership: 
A. Is also called a sole proprietorship.
B. Has unlimited liability.
C. Has to have a written agreement in order to be legal.
D. Is a legal organization separate from its owners.
E. Has owners called shareholders.
 131. According to generally accepted accounting principles, a company's balance sheet
should show the company's assets at: 
A. The cash equivalent value of what was given up or received.
B. The current market value of the asset received in all cases.
C. The cash paid only, even if something other than cash was given in the exchange.
D. The best estimate of a certified internal auditor.
E. The objective value to external users.
132. If a business is not being sold or closed, the amounts reported in the accounts for assets
used in operations are based on costs. This practice is best justified by the: 
A. Cost principle.
B. Going-concern principle.
C. Objectivity principle.
D. Business entity principle.
E. Both A and B.
133. Which of the following accounting principles would require that all goods and services
purchased be recorded at cost? 
A. Going-concern principle.
B. Continuing-concern principle.
C. Cost principle.
D. Business entity principle.
E. Consideration principle.
134. Revenue is properly recognized: 
A. When the customer's order is received.
B. Only if the transaction creates an account receivable.
C. At the end of the accounting period.
D. Upon completion of the sale or when services have been performed and the business
obtains the right to collect the sales price.
E. When cash from a sale is received.
135. If a parcel of land that was originally purchased for $85,000 is offered for sale at
$150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily
being worth $140,000, and is sold for $137,000, the land account transaction amount to
handle the sale of the land in the seller's books is: 
A. $85,000 increase
B. $85,000 decrease
C. $137,000 increase
D. $137,000 decrease
E. None of these
136. If a parcel of land that was originally purchased for $85,000 is offered for sale at
$150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily
being worth $140,000, and is sold for $137,000. What is the effect of the sale on the
accounting equation for the seller? 
A. Assets increase $52,000; owner's equity increases $52,000
B. Assets increase $85,000; owner's equity increases $85,000
C. Assets increase $137,000; owner's equity increases $137,000
D. Assets increase $140,000; owner's equity increases $140,000
E. None of these
 137. If a parcel of land that was originally purchased for $85,000 is offered for sale at
$150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily
being worth $140,000, and is sold for $137,000. At the time of the sale, assume that the seller
still owed $30,000 to TrustOne Bank on the land that was purchased for $85,000.
Immediately after the sale, the seller paid off the loan to TrustOne Bank. What is the effect of
the sale and the payoff of the loan on the accounting equation? 
A. Assets increase $52,000; owner's equity increases $22,000; liabilities decrease $30,000
B. Assets increase $52,000; owner's equity increases $30,000; liabilities decrease $30,000
C. Assets increase $22,000; owner's equity increases $52,000; liabilities decrease $30,000
D. Assets decrease $30,000; owner's equity decreases $30,000; liabilities decrease $30,000
E. Assets decrease $55,000; owner's equity decreases $55,000; liabilities decrease $30,000
138. An example of a financing activity is: 
A. Buying office supplies.
B. Obtaining a long-term loan.
C. Buying office equipment.
D. Selling inventory.
E. Buying land.
 139. An example of an operating activity is: 
A. Paying wages.
B. Purchasing office equipment.
C. Borrowing money from a bank.
D. Selling stock.
E. Paying off a loan.
 140. Planning activities: 
A. Are the means organizations use to pay for resources.
B. Involve the acquiring and disposing of resources that an organization uses to acquire and
sell its products or services.
C. Involve defining the ideas, goals, and actions of an organization.
D. Are the carrying out of an organization's plans.
E. Involve using resources to research, develop, purchase, produce, and market products and
services.
 141. Operating activities: 
A. Are the means organizations use to pay for resources like land, buildings and equipment.
B. Involve using resources to research, develop, purchase, produce, distribute and market
products and services.
C. Involve acquiring and disposing of resources that a business uses to acquire and sell its
products or services.
D. Are also called asset management.
E. Are also called strategic management.
 142. The major activities of a business include: 
A. Operating.
B. Financing.
C. Investing.
D. All of these.
143. An example of an investing activity is: 
A. Paying wages of employees.
B. Withdrawals by the owner.
C. Purchase of land.
D. Selling inventory.
E. Contribution from owner.
144. Net Income: 
A. Decreases equity.
B. Represents the amount of assets owners put into a business.
C. Equals assets minus liabilities.
D. Is the excess of revenues over expenses.
E. Represents owners' claims against assets.
 145. If equity is $300,000 and liabilities are $192,000, then assets equal: 
A. $108,000.
B. $192,000.
C. $300,000.
D. $492,000.
E. $792,000.
146. Resources owned or controlled by a company that are expected to yield future benefits
are: 
A. Assets.
B. Revenues.
C. Liabilities.
D. Owner's Equity.
E. Expenses.
 147. Gross increases in equity from a company's earnings activities are: 
A. Assets.
B. Revenues.
C. Liabilities.
D. Owner's Equity.
E. Expenses.
148. Net income is: 
A. Assets minus liabilities.
B. The excess of revenues over expenses.
C. An asset.
D. The same as revenue.
E. The excess of expenses over equity.
149. The difference between a company's assets and its liabilities, or net assets is: 
A. Net income.
B. Expense.
C. Equity.
D. Revenue.
E. Net loss.
150. Creditors' claims on the assets of a company are called: 
A. Net losses.
B. Expenses.
C. Revenues.
D. Equity.
E. Liabilities.
151. Decreases in equity that represent costs of assets or services used to earn revenues are
called: 
A. Liabilities.
B. Equity.
C. Withdrawals.
D. Expenses.
E. Owner's Investment.
152. The description of the relation between a company's assets, liabilities, and equity, which
is expressed as Assets = Liabilities + Equity, is known as the: 
A. Income statement equation.
B. Accounting equation.
C. Business equation.
D. Return on equity ratio.
E. Net income.
153. Assets = Liabilities + Equity is known as the: 
A. Income statement equation.
B. Cost principle.
C. Objectivity principle.
D. Accounting equation.
E. Transaction principle.
154. Expenses: 
A. Increase equity.
B. Are gross increases in equity from a company's earning activity.
C. Are the costs of assets or services used to earn revenues.
D. Occur when equity exceeds revenue.
E. Are creditors claims on assets.
155. Net income: 
A. Occurs when revenues exceed expenses.
B. Is the same as revenue.
C. Equals resources owned or controlled by a company.
D. Occurs when expenses exceed assets.
E. Represents assets taken from a company for an owner's personal use. 
156. Revenues are: 
A. The same as net income.
B. The excess of expenses over assets.
C. Resources owned or controlled by a company
D. The gross increase in equity from a company's earning activities.
E. The costs of assets or services used.
157. Accounting 
A. Is an information and measurement system.
B. Identifies, records, and communicates information about business activities
C. Helps people make better decisions
D. Involves interpreting information and designing information systems to provide useful
reports that monitor and control a company's activities.
E. All of these
158. If assets are $99,000 and liabilities are $32,000, then equity equals: 
A. $32,000.
B. $67,000.
C. $99,000.
D. $131,000.
E. $198,000.
159. Another name for equity is: 
A. Net income.
B. Expenses.
C. Net assets.
D. Revenue.
E. Net loss.
160. The excess of expenses over revenues for a period is: 
A. Net assets.
B. Equity.
C. Net loss.
D. Net income.
E. A liability.
161. Which of the following statements is true about assets? 
A. They are economic resources owned or controlled by the business.
B. They are expected to provide future benefits to the business.
C. They appear on the balance sheet.
D. Claims on them can be shared between creditors and owners.
E. All of these.
 162. A payment to an owner is called a(n): 
A. Liability.
B. Withdrawal.
C. Expense.
D. Contribution.
E. Investment.
 163. Distributions by a business to its owners are called: 
A. Withdrawals.
B. Expenses.
C. Assets.
D. Retained earnings.
E. Net Income.
164. The balance sheet equation is: 
A. Revenues minus expenses equals net income.
B. Debits equal credits.
C. The bookkeeping phase of accounting.
D. Another name for the accounting equation.
E. Assets minus liabilities and equity.
 165. The assets of a company total $700,000; the liabilities, $200,000. What are the claims of
the owners? 
A. $900,000.
B. $700,000.
C. $500,000.
D. $200,000.
E. It is impossible to determine unless the amount of this owners' investment is known.
166. On June 30 of the current year, the assets and liabilities of Phoenix Phildell are as
follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000;
Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current
year? 
A. $8,300
B. $13,050
C. $20,500
D. $31,100
E. $40,400
167. Assets created by selling goods and services on credit are: 
A. Accounts payable.
B. Accounts receivable.
C. Liabilities.
D. Expenses.
E. Equity.
 168. An exchange of value between two entities is called: 
A. The accounting equation.
B. Recordkeeping or bookkeeping.
C. A business transaction.
D. An asset.
E. Net Income.
 169. Photometer Company paid off $30,000 of its accounts payable in cash. What would be
the effects of this transaction on the accounting equation? 
A. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase.
B. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.
C. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect.
D. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase.
E. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.
 170. How would the accounting equation of Boston Company be affected by the billing of a
client for $10,000 of consulting work completed? 
A. +$10,000 accounts receivable, -$10,000 accounts payable.
B. +$10,000 accounts receivable, +$10,000 accounts payable.
C. +$10,000 accounts receivable, +$10,000 cash.
D. +$10,000 accounts receivable, +$10,000 revenue.
E. +$10,000 accounts receivable, -$10,000 revenue.
 171. Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000.
It buys office equipment on credit for $75,000. What would be the effects of this transaction
on the accounting equation? 
A. Assets increase by $75,000 and expenses increase by $75,000.
B. Assets increase by $75,000 and expenses decrease by $75,000.
C. Liabilities increase by $75,000 and expenses decrease by $75,000.
D. Assets decrease by $75,000 and expenses decrease by $75,000.
E. Assets increase by $75,000 and liabilities increase by $75,000.
172. Viscount Company collected $42,000 cash on its accounts receivable. The effects of this
transaction as reflected in the accounting equation are: 
A. Total assets decrease and equity increases.
B. Both total assets and total liabilities decrease.
C. Total assets, total liabilities, and equity are unchanged.
D. Both total assets and equity are unchanged and liabilities increase.
E. Total assets increase and equity decreases.
 173. If the liabilities of a business increased $75,000 during a period of time and the owner's
equity in the business decreased $30,000 during the same period, the assets of the business
must have: 
A. Decreased $105,000.
B. Decreased $45,000.
C. Increased $30,000.
D. Increased $45,000.
E. Increased $105,000.
174. If the assets of a business increased $89,000 during a period of time and its liabilities
increased $67,000 during the same period, equity in the business must have: 
A. Increased $22,000.
B. Decreased $22,000.
C. Increased $89,000.
D. Decreased $156,000.
E. Increased $156,000.
175. If the liabilities of a company increased $74,000 during a period of time and equity in
the company decreased $19,000 during the same period, what was the effect on the assets? 
A. Assets would have increased $55,000.
B. Assets would have decreased $55,000.
C. Assets would have increased $19,000.
D. Assets would have decreased $19,000.
E. None of these.
176. If a company paid $38,000 of its accounts payable in cash, what was the effect on the
assets, liabilities, and equity? 
A. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would
decrease $38,000.
B. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would
increase $38,000.
C. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would not
change.
D. There would be no effect on the accounts because the accounts are affected by the same
amount.
E. None of these.
 177. If assets are $365,000 and equity is $120,000, then liabilities are: 
A. $120,000.
B. $245,000.
C. $365,000.
D. $485,000.
E. $610,000.
178. Return on assets is: 
A. Also called return on investment.
B. ROA.
C. Computed by dividing net income by average total assets.
D. Used in helping evaluate management.
E. All of these.
179. Reebok had income of $150 million and average invested assets of $1,800 million. Its
return on assets is: 
A. 8.3%.
B. 83.3%.
C. 12%.
D. 120%.
E. 16.7%.
180. Nike had income of $350 million and average invested assets of $2,000 million. Its ROA
is: 
A. 1.8%.
B. 35%.
C. 17.5%.
D. 5.7%.
E. 3.5%.
181. FastForward has net income of $18,955, and assets at the beginning of the year of
$200,000. Assets at the end of the year total $246,000. Compute its return on assets. 
A. 7.7%.
B. 8.5%.
C. 9.5%.
D. 11.8%.
E. 13.0%.
182. Harris Co. has a net income of $43,000, assets at the beginning of the year are $250,000
and assets at the end of the year are $300,000. Compute its return on assets. 
A. 8.4%
B. 17.2%
C. 14.3%
D. 15.6%
E. 1.5%
183. U. S. government bonds are: 
A. High-risk and high-return investments.
B. Low-risk and low-return investments.
C. High-risk and low-return investments.
D. Low-risk and high-return investments.
E. High risk and no-return investments.
184. Risk is: 
A. Net income divided by average total assets.
B. The reward for investment.
C. The uncertainty about the expected return to be earned.
D. Unrelated to expected return.
E. Derived from the idea of getting something back from an investment.
185. The statement of cash flows reports on cash flows for: 
A. Operating activities.
B. Investing activities.
C. Financing activities.
D. Planning activities.
E. A, B and C only.
 186. The basic financial statements include the: 
A. Balance Sheet.
B. Income Statement.
C. Statement of Owner's Equity.
D. Statement of Cash Flows.
E. All of these.
187. The statement of cash flows reports information on: 
A. Revenue activities.
B. Operating activities.
C. Financing activities.
D. Investing activities.
E. B, C, and D.
188. The statement of owner's equity: 
A. Reports how equity changes at a point in time.
B. Reports how equity changes over a period of time.
C. Reports on cash flows for operating, financing, and investing activities over a period of
time.
D. Reports on cash flows for operating, financing, and investing activities at a point in time.
E. Reports on amounts for assets, liabilities, and equity at a point in time.
 189. The financial statement that reports whether the business earned a profit and also lists
the types and amounts of the revenues and expenses is called: 
A. A Balance sheet.
B. A Statement of owner's equity.
C. A Statement of cash flows.
D. An Income statement.
E. A Statement of financial position.
 190. A balance sheet lists: 
A. The types and amounts of the revenues and expenses of a business.
B. Only the information about what happened to equity during a time period.
C. The types and amounts of assets, liabilities, and equity of a business as of a specific date.
D. The inflows and outflows of cash during the period.
E. The assets and liabilities of a company but not the owner's equity.
191. A financial statement providing information that helps users understand a company's
financial status, and which lists the types and amounts of assets, liabilities, and equity as of a
specific date, is called a(n): 
A. Balance sheet.
B. Income statement.
C. Statement of cash flows.
D. Statement of owner's equity.
E. Financial Status Statement.
192. The financial statement that describes where a company's cash came from and where it
went during the period is the: 
A. Statement of financial position.
B. Statement of cash flows.
C. Balance sheet.
D. Income statement.
E. Statement of changes in owner's equity.
 193. The financial statement that shows the beginning balance of owner's equity; the changes
in equity that resulted from new investments by the owner, net income (or net loss);
withdrawals; and the ending balance, is the: 
A. Statement of financial position.
B. Statement of cash flows.
C. Balance sheet.
D. Income statement.
E. Statement of owner's equity.
  194. Cash investments by owners are listed on which of the following statements? 
A. Balance sheet.
B. Income statement.
C. Statement of owner's equity.
D. Statement of cash flows.
E. Both C and D.
195. Accounts payable appear on which of the following statements? 
A. Balance sheet.
B. Income statement.
C. Statement of owner's equity.
D. Statement of cash flows.
E. Transaction statement.
196. The income statement reports all of the following except: 
A. Revenues earned by a business.
B. Expenses incurred by a business.
C. Assets owned by a business.
D. Net income or loss earned by a business.
E. The time period over which the earnings occurred.
197. Use the following information as of December 31 to determine equity.

    
A. $57,000.
B. $141,000.
C. $297,000.
D. $438,000.
E. $579,000.
198. Determine the net income of a company for which the following information is available
for the month of May.

    
A. $190,000.
B. $210,000.
C. $230,000.
D. $400,000.
E. $610,000.
199. A company acquires equipment for $75,000 cash. This represents a(n) 
A. Operating activity.
B. Investing activity.
C. Financing activity.
D. Revenue activity.
E. Expense activity.
200. A company borrows $125,000 from the Eastside Bank and receives the loan proceeds in
cash. This represents a(n): 
A. Revenue activity.
B. Operating activity.
C. Expense activity.
D. Investing activity.
E. Financing activity.
201. Flash had cash inflows from operations $62,500; cash outflows from investing activities
of $47,000; and cash inflows from financing of $25,000. The net change in cash was: 
A. $40,500 increase.
B. $40,500 decrease.
C. $134,500 decrease.
D. $134,000 increase.
E. $9,500 increase.
202. Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000
and investments by owners of $6,000. Its ending equity is: 
A. $223,000.
B. $240,000.
C. $268,000.
D. $274,000.
E. $208,000.
203. Rent expense that is paid with cash appears on which of the following statements? 
A. Balance sheet.
B. Income statement.
C. Statement of owner's equity.
D. Statement of cash flows.
E. Both B and D.
204. Fees earned (but not yet received in cash) by a business in exchange for services it
provided appear on which of the following statements? 
A. Balance sheet.
B. Income statement.
C. Statement of owner's equity.
D. Statement of cash flows.
E. Both A and B.
205. A company's balance sheet shows: cash $22,000, accounts receivable $16,000, office
equipment $50,000, and accounts payable $17,000. What is the amount of owner's equity? 
A. $17,000.
B. $29,000.
C. $71,000.
D. $88,000.
E. $105,000.
206. A company reported total equity of $145,000 on its December 31, 2008 balance sheet.
The following information is available for the year ended December 31, 2009:

   
What are the total assets of the company at December 31, 2009? 
A. $45,000.
B. $92,000.
C. $98,000.
D. $210,000.
E. $282,000.