Principles 1-Exam IA- Spring 218 Name ar CHOICE. Choose the one alternative that

Question

Principles 1-Exam IA- Spring 218 Name ar CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) GAAP refers to guidelines for accounting information in i acronym GAAP in this statement refers to A) Globally Accepted Accounting Policies B) Generally Accepted Accounting Principles C) Generally Accredited Accounting Policies D) Govemment Approved Accounting Prindiples 2) Lisa Smith decided to start her CPA practice as a sole proprietonship. The business purchased an2) office building for $35,000 The real estate agent said the building was worth $50,000 in the curnent market The basiness recorded the building as a $50,000 asset because value of the building Which of the following concepts or prindiples of accounting is being Lisa believes that is the real violated? A) going concen assumption C) economic entity assumption B) monetary unit assumption D) cost prindiple 3) Stuart Allen Company manufactures compater hardware. The president of the company bought a3 cash from the business. Since the company new car as a gift for hás daughter and paid for it using paid for the car, it was recorded in its books as an asset Which of the following concepts or principles of accounting did the company violabe? A) cost principle C) monetary unit assumption B) going convcern assumption D) economic entity assumption 4) The Sarbanes-Onley Act (50x A) ensures that financial scandals w'll no longer occur B) created the SEC C) requires companies to take responsibility for the accuracy and completeness of their financial reports D) requires independent accountants to take responsibility for the accuracy and completeness of the financial reports 5) Precision Camera Services started the year with total assets of $120,000 and total liabilities of 5) $40,000. The company is a sole proprietorship. The revenues and the expenses for the year amounted to $140,000 and $50,000, respectively. During the year, there were no new capital contributions and the owner withdrew $45,000. What is the amount of owner's equity at the end of the year? A) $140,000 B) $125,000 C) $50,000 D) 545,000 6) Diamond Company had the following transactions during June: Performed services for $3,000 on account: received cash on account, 58,000 paid $900 for repair epu paid $1,600 to a supplier that it owed fron the previous month What is the coembined efect on Cast these June transactions? A) $2.500 decrease B) $5,500 increase C) $8,000 increase D) 55 500 decrease

Explanation / Answer

Question Answer Explanation 1 B Generally accepted accounting Principles 2 B Its monetary unit assumption 3 D It violated economic entity assumption that resources of business cannot be used for personal purpose. 4 C It requires management to ensure that internal controls are in place to ensure financial report does not include any error. Please raise another question for remaining part as per Chegg policy.

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