1 A CPA, who is an independent auditor, is an internal user of accounting information because as an auditor, the CPA will have access to the confidential accounting information. a. TRUE b. FALSE 2 Relevance and Understandability are the two fundamental qualities that make accounting information useful for decision making. a. TRUE b. FALSE 3 Which of the following assumption assumes that a business will continue as a profitable business in the future period? a. Economic entity b. Going concern c. Monetary unit d. Periodicity 4 John Delphia sold a machine to Dorthy Constructions at $100,000. His profit margin on cost was 28%. At what price Mr. Delphia purchased the machine? a. b. 5 Ariel C. purchased an office equipment priced at $50,000. To purchase this machine, Arial contributed $10,000 to the business (business ran out of cash and Ariel needed to contribute capital) and took a bank loan for the remainder. How does this impact the Accounting Equation? (extra point if you show the journal entry) C. d. Assets Increases Increases No Impact Decreases Liabilities Increases Decreases Increases No Impact Equity Increases 10 No Impact Decreases Increases 4040

1ACPA, who is an independent auditor, is an internal user of accounting information because as an auditor, the CPA will have access to the confidential accounting information. a. TRUE b. FALSE 2 Relevance and Understandability are the two fundamental qualities that make accounting information useful for decision making. a. TRUE b. FALSE 3 Which of the following assumption assumes that a business will continue as a profitable business in the future period? a. Economic entity b. Going concern c. Monetary unit d. Periodicity 4 John Delphia sold a machine to Dorthy Constructions at $100,000. His profit margin on cost was 28%. At what price Mr. Delphia purchased the machine? 5 Ariel C. purchased an office equipment priced at $50,000. To purchase this machine, Arial contributed $10,000 to the business (business ran out of cash and Ariel needed to contribute capital) and took a bank loan for the remainder. How does this impact the Accounting Equation? (extra point if you show the journal entry)