ACC 120 - Chapter 1: The Framework
Provide services to customers
Operating
In our society, the two main functions of accounting are to
- Communicate information to creditors and investors - Measure business activities
The primary functions of accounting are to:
- Communicate information to decision makers - Measure a company's activities.
Which of the following knowledge and skills should an accounting professional possess?
- Presentation skills - Technical accounting knowledge - Leadership skills - Ability to work in teams
Which of the following are financial statements?
- Statement of Stockholders' Equity - Balance Sheet - Income Statement
The four financial statements published to provide information to external users include which of the following?
- Statement of Stockholders' Equity - Income Statement - Statement of Cash Flows - Balance Sheet
Land (Property used for operations)
Asset
Equipment (Equipment used for operations)
Assets
The financial statement that is most useful in explaining a company's stock price performance is the
Income Statement
The form of business organization where an entity is legally separate from its owners and issues shares of stock is a
Corporation
Economic events can be identified with a particular economic body
Economic entitiy
___ is a term that refers to a code or moral system that provides criteria for evaluating right or wrong.
Ethics
Research and development expense (cost of research and development)
Expense
Utilities Expense (Cost of utilites)
Expense
The private sector organization that is currently responsible for setting accounting standards in the United States is the
FASB
_____ is the common abbreviation for the Board that currently establishes financial accounting and reporting standards in the U.S.
FASB
Accounting can be defined as a math course (True/False)
False
True or false: Technical accounting skills represent the only skills required of accounting professionals.
False
_____ Statements represent a company's primary means of communicating information to external user
Financial
Companies communicate information about their business activities primarily through
Financial statements
Borrowing from the bank
Financing
Pay dividends to stockholders
Financing
Issue common stock to investors
Finanicing
In the absence of information to the contrary, it is anticipated that a business entity will continue to operate indefinitely.
Going concern
Purchase building
Investing
Purchase land
Investing
Income tax payable
Liability
Interest payable
Liability
Salaries payable (Amounts owed to employees)
Liability
A common denominator is needed to measure all business activates
Monetary unit
Pay rent for the current period
Operating
The economic life of a company can be divided into artificial time intervals for financial reporting
Periodicity
The two main career paths in accounting are referred to as:
Public and private
Service revenue (Sales of services to customers)
Revenue
An advantage of the corporate form of organization is that a corporation
Stockholders have limited liability
Accounting can be defined as a measurement/communication process (True/False)
True
Accounting can be defined as the language of business (True/False)
True
True or false: Accounting professionals enjoy a wide variety of career opportunities.
True
The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as ____
accounting
Supplies (Purchase of office supplies)
asset
Information that best explains companies' stock price performance is reported in the ____
income statement
The hierarchy of qualitative characteristics of financial information require that, in order to be useful for decision making, information should possess the fundamental characteristics of
relevance and faithful representation.
Common stock (sale of common stock to investors)
stockholders equity
