Question :
81. The objectivity concept requires that A. business transactions must be consistent with : 1251311
81. The objectivity concept requires that
A. business transactions must be consistent with the objectives of the entity
B. the Financial Accounting Standards Board must be fair and unbiased in its deliberations over new accounting standards
C. accounting principles must meet the objectives of the Security and Exchange Commission
D. amounts recorded in the financial statements must be based on independently verifiable evidence
82. Denzel Jones is the major stockholder of Crystal Cleaning Company, a small corporation. Recently, Denzel received $18,000 of dividends from Crystal Cleaning. After receiving the dividends, he contributed $14,000, in his name, to Habitat for Humanity. The contribution of the $14,000 should be recorded on the accounting records of which of the following entities?
A. Crystal Cleaning and Habitat for Humanity
B. Denzel Jones’ personal records and Habitat for Humanity
C. Denzel Jones’ personal records and Crystal Cleaning
D. Denzel Jones’ personal records, Crystal Cleaning, and Habitat for Humanity
83. Equipment with an estimated market value of $55,000 is offered for sale at $75,000. The equipment is acquired for $20,000 in cash and a note payable of $40,000 due in 30 days. The amount used in the buyer’s accounting records to record this acquisition is
A. $55,000
B. $60,000
C. $20,000
D. $75,000
84. Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting principles?
A. FASB
B. IRS
C. SEC
D. AICPA
85. Which of the following concepts relates to separating the reporting of business and personal economic transactions?
A. cost concept
B. unit of measure concept
C. business entity concept
D. objectivity concept
86. Donner Company is selling a piece of land adjacent to their business. An appraisal reported the market value of the land to be $120,000. The Focus Company initially offered to buy the land for $107,000. The companies settled on a purchase price of $115,000. On the same day, another piece of land on the same block sold for $122,000. Under the cost concept, what is the amount that will be used to record this transaction in the accounting records?
A. $107,000
B. $115,000
C. $120,000
D. $122,000
87. The unit of measure concept
A. is only used in the financial statements of manufacturing companies
B. is not important when applying the cost concept
C. requires that different units be used for assets and liabilities
D. requires that economic data be reported in yen in Japan or dollars in the United States
88. Which of the following is not true of accounting principles?
A. Financial accountants follow generally accepted accounting principles (GAAP).
B. Following GAAP allows accounting information users to compare one company to another.
C. A new accounting principle can be adopted with stockholders approval.
D. The Financial Accounting Standards Board (FASB) has primary responsibility for developing accounting principles.
89. Assets are
A. always greater than liabilities
B. either cash or accounts receivables
C. the same as expenses because they are acquired with cash
D. financed by owners and/or creditors
90. Debts owed by a business are referred to as
A. accounts receivables
B. assets
C. owner’s equity
D. liabilities
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