【正文】 ess of expenses over revenues, whereas net loss is the excess of revenues over expenses.FALSEt65.Every business transaction leaves the accounting equation in balance.TRUEsy66.An external transaction is an exchange of value within an organization.FALSEsy67.From an accounting perspective, an event is a happening that affects an entity39。s accounting equation, but cannot be measured.FALSEsy68.Owner39。s equity is increased when cash is received from customers in payment of previously recorded accounts receivable.FALSEt69.An owner39。s investment in a business always creates an asset (cash), a liability (note payable), and owner39。s equity (investment.)FALSEt70.Net assets always increase when revenue is recorded.TRUEt71.Return on assets is often stated in ratio form as the amount of average total assets divided by ine.FALSEt72.Return on assets is also known as return on investment.TRUEsy73.Return on assets is useful to decision makers for evaluating management, analyzing and forecasting profits, and in planning activities.TRUEsy74.Reebok39。s net ine of $117 million and average assets of $1,400 million results in a return on assets of %.TRUEt75.Return on assets measures the effectiveness of an organization39。s ability to generate profit using its assets.TRUEt: A476.Risk is the amount of uncertainty about the return we expect to earn.TRUEgy: A477.Generally the lower the risk, the lower the return that can be expected.TRUEg: A478.U. S. Government Treasury bonds provide high return and low risk to investors.FALSEg: A479.The four basic financial statements include the balance sheet, ine statement, statement of owner39。s equity, and statement of cash flows.TRUEsy80.An ine statement reports on investing and financing activities.FALSEy81.A balance sheet covers a period of time such as a month or year.FALSEy82.The ine statement is a financial statement that shows revenues earned and expenses incurred during a specified period of time.TRUEy83.The statement of cash flows shows the net effect of revenues and expenses for a reporting period.FALSEy84.The ine statement shows the financial position of a business on a specific date.FALSEy85.The first section of the ine statement reports cash from operations.FALSEy86.The balance sheet is based on the accounting equation.TRUEy87.Owner39。s contributions and withdrawals are reported on the ine statement.FALSEy88.Investing activities involve the buying and selling of assets such as land and equipment that are held for longterm use in the business.TRUEy89.Operating activities include longterm borrowing and repaying cash from lenders, and cash investments or withdrawals by the owner.FALSEy90.The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.FALSEy91.The ine statement reports on operating activities at a point in time.FALSEy92.The statement of cash flows reports on cash flows separated into operating, investing, and financing activities over a period of time.TRUEy93.Chuck Taylor invested $175,000 cash in FastForward. This amount would be reported in the statement of cash flows under financing activities.TRUEy94. Chuck Taylor withdrew $6,000 in cash from FastForward. This amount should be included as an expense on the ine statement. FALSEy Multiple Choice Questions 95.Accounting is an informationt system that:A.Identifies business activities.B.Records business activities.C.Communicates business activities.D.Helps people make better decisions.E.All of these.y: C196.TechnologyA.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.AACSB: TechnologyyAICPA FN: Leveraging Technology: C197.The primary objective of financial accounting is:A.To serve the decisionmaking needs of internal users.B.To provide financial statements to help external users analyze an organization39。s activities.C.To monitor and control pany 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.sy: C298.Internal users of accounting information include:A.Shareholders.B.Managers.C.Lenders.D.Suppliers.E.Customers.sy: C2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.sy: C2100.The operating functions of a business include:A.Research and development.B.Purchasing.C.Marketing.D.Distribution.E.All of these.sy: C2101.sy: C3102.Career opportunities in accounting include:A.Auditing.B.Management consulting.C.Tax accounting.D.Cost accounting.E.All of these.sy: C3103.Career opportunities in accounting include: