BASIC FINANCIAL ACCOUNTING

What is the impact on the cash flow statement from a decrease in accounts receivable, assuming the indirect method is used?

An increase in the cash flow from operating activities

When does Interest payable on a loan becomes a liability?

As it accrues

What is the distinguishing characteristic between accounts receivable and notes receivable?

Notes receivable result from a written promise to pay within a specified amount of time

To determine the course of a company's noncurrent assets, on which financial statement will you look?

Balance Sheet only

Rent owed to the landlord is a balance sheet item for Stark Corporation. How would it most likely be classified on the balance sheet of Stark Corporation?

Current liability

What is true regarding dividend income?

Dividend income is reported on the Income Statement

The Retained Earnings account balance for a large corporation is $10,000,000. This amount represents

Earnings that have not been distributed to shareholders

Which one of the following groups is considered an internal user of financial statements?

Factory managers that supervise production line workers

What is the name of the branch of accounting concerned with providing managers and administrators with information to facilitate the planning and control of business operations?

Management Accounting

Which of the following is an investing activity on the statement of cash flows?

Purchasing of long-term investments

Which of the following would be classified as external users of financial statements?

The creditors and shareholders of the company

When are revenues and expenses recognized in the same accounting period that cash receipts and payments occur?

Under the cash basis of accounting

Which of the following statements would be true if you own stock or share in a company?

You have a claim to the assets of the business