ACG Chapter 1
Which financial statement is dated as of a specific point in time? -Income statement -Balance sheet -Statement of cash flows -Retained earnings statement -Statement of stockholders' equity
-Balance Sheet
Which statement about users of accounting information is correct? -Regulatory authorities are considered internal users. -Labor unions are considered internal users. -Taxing authorities are considered internal users. -Creditors are considered external users. -Management is considered an external user.
-Creditors are considered external users.
Which of the following would appear on a balance sheet? -Retained earnings -Dividends -Service revenue -Salaries and wages expense -Net cash flows from operating activities
-Retained earnings
Which of the following did not result from the Sarbanes-Oxley Act (SOX)? -Penalties for fraudulent activity increased. -The Sarbanes-Oxley Act caused all of these to occur. -Top management must now certify the accuracy of financial information. -Tax rates on corporations increased. -SOX increased independent auditors' independence.
-Tax rates on corporations increased.
Which financial statement shows both a company's net income and the amount it pays in dividends? -The balance sheet -The sources and uses statement -The income statement -The statement of stockholders' equity -The statement of cash flows
-The statement of stockholders' equity
A company borrows money from a bank. It should report the cash received from the bank on its statement of cash flows as -an investment activity. -a supplying activity. -a marketing activity. -an operating activity. -a financing activity.
-a financing activity.
If a company sells goods to a customer and does not receive cash immediately, then the company has a right to expect payment from that customer in the near future. The right to receive money in the future is called -an account receivable. -an unearned revenue. -an account payable. -stockhodlers' equity. -retained earnings.
-an account receivable.
In terms of the principal types of cash flow activities, paying for goods and services is an example of -an investing activity. -an advertising activity. -a financing activity. -None of these -an operating activity.
-an operating activity
What type of account or account classification is retained earnings? -Expense -Equity -Asset -Revenue -Liability
-equity
The portion of the annual report that presents management's views on the company's ability to fund operations and expansion is the -management discussion and analysis. -chief executive's officer's reconciliation. -notes to the financial statements. -auditor's report. -investor analysis report.
-management discussion and analysis.
Amounts earned on the sale of products or services to customers is known as -assets. -expenses. -revenue. -equity. -liabilities.
-revenue
Easy transfer of ownership is a characteristic of which form of business organization? -Sole proprietorship -Sole proprietorships and partnerships -Partnership -Corporation -Partnerships and corporations
Corporation
Paying cash to buy stocks or bonds of another company is an example of
an investing activity
When the auditor is satisfied that the financial statements provide a fair representation of the company's financial position and results of operation in accordance with generally accepted accounting principles, the auditor will express
an unqualified opinion
Resources owned by a business are referred to as
assets
How to calculate net cash from operating activities
cash collected from customers minus payments fr employee salaries
How to calculate beginning retained earnings/ ending retained earnings
ending retained earnings= beginning retained earnings + net income - dividends -replace net income with revenue - expenses -rearrage to solve for beginning retained earnings
Publicly-traded U.S. companies must provide shareholders with an annual report. Which of the following is not part of the annual report provided to shareholders?
internal and external users report
Which of the following did NOT result from the Sarbanes-Oxley Act (SOX)?
it decreased the oversight role of boards of directors
The sole proprietorship of business organization
must only have one owner
If the retained earnings account decreases from the beginning fo the year to the end of the year, which of the following must be true?
net income is less than dividends
How to calculate net income
net income= revenues - expenses
Which of the following best describes stockholders equity?
stockholder's equity are the claims of owners
Which of the following is an external user of accounting data?
the company's stockholders
Which of the following best describes accounting?
the information system that identifies, measures, and communicates the economic of an organization to interested users
Which of the following describes that sequence in which financial statements are prepared?
the statement of stockholder's equity is prepared before the balance sheet
