Devry ACCT 212 Week 1 Quiz

Question 1. (TCO 1) Accounting

• measures business activities.
• processes data into reports and communicates the data to decision makers.
• is often called the language of business.
• All of the above

Question 2. (TCO 1) Decision makers who use accounting include

• the SEC.
• investors.
• managers.
• All of the above

Question 3. (TCO 1) The Financial Accounting Standards Board is responsible for establishing

• the code of professional conduct for accountants.
• the Securities and Exchange Commission.
• generally accepted accounting principles.
• international accounting financial standards.

Question 4. (TCO 1) Historical cost

• is determined for each asset on a yearly basis.
• is equal to the amount of cash paid less the dollar value of all non-cash consideration given in the exchange.
• is a verifiable measure that is relatively free from bias.
• is the amount that the business could sell the asset for.

Question 5. (TCO 1) Another way to state the accounting equation is

• Assets = Liabilities + Paid-in Capital – Common Stock
• Assets = Liabilities + Retained Earnings
• Assets = Liabilities + Paid-in Capital + Retained Earnings
• Assets = Liabilities – Paid-in Capital – Dividends

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Question 6. (TCO 1) The major types of transactions that affect retained earnings are

• paid-in capital and common stock.
• assets and liabilities.
• revenues, expenses, and dividends.
• revenues and liabilities.

Question 7. (TCO 1) Expenses of a business include

• sales and cash equivalents.
• common stock and rent.
• cost of goods sold and salaries.
• retained earnings and utilities.

Question 8. (TCO 1) The correct data flow from one financial statement to the next is

• statement of retained earnings, income statement, balance sheet, statement of cash flows.
• balance sheet, statement of retained earnings, income statement, statement of cash flows.
• statement of retained earnings, income statement, statement of cash flows, balance sheet.
• income statement, statement of retained earnings, balance sheet, statement of cash flows.

Question 9. (TCO 1) Which statement(s) summarizes the revenues, gains, expenses, and losses of an entity?

• Balance sheet
• Statement of cash flows and income statement
• Statement of retained earnings and statement of operations
• Income statement

Question 10. (TCO 1) Continuing negative cash flow from which of the following activities can lead to bankruptcy?

• Equity activities
• Operating activities
• Financing activities
• Investing activities