Chapter 1

Given the accounts below, choose all of the ones that affect equity. (Check all answers that apply.): Dividends Notes Payable Revenues Expenses Cash Common Stock Accounts Payable

Dividends Revenues Expenses Common Stock

An employee that is having trouble paying his personal bills might exhibit the following fraud factor:

Pressure

A graphical presentation of data to help in understanding their significance is called data

visualization

Sheldon Company had beginning retained earnings of $1,000, net income of $5,000, and dividends of $250. The ending balance in the retained earnings account is

$5,750 $1000 + $5000 - $$250 = $5750

+ Equity contains:

+ Common Stock - Dividends + Revenues - Expenses

Statement of cash flow is:

+/- Operating Cash flow +/- Investing Cash Flow +/- Financing Cash Flow = Change in Cash + is inflows (receipts) - Cash outflows (Payments)

When recording transactions into the accounting equation, which of the following statements are correct? (Check all that apply.)

-The accounting equation must always remain in balance. -After recording the transaction, total assets will always equal total liabilities plus equity.

Liabilities + contains:

Accounts payable

Identify the correct definition of an asset:

An asset is a resource that a business owns or controls

Describe the order in which a company prepares financial statements.

Income statement Statement of Retained Earnings Balance Sheet Statement of Cash Flows

Given that Jacob's Chocolates Company had beginning retained earnings of $4,000; net income during the period of $10,000; and dividends of $300 calculate the ending balance in the retained earnings account.

$13,700 $4000 + $10000 - $300 = $13700

Which of the following statements below lists the rules of entering transactions into the accounting equation?

The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.

A process of analyzing data to identify meaningful relations and trends is called data

analytics

Balance sheet is:

assets = liabilities + equity

An external user of accounting information

does not directly run the organization

The four financial statements are

income statement statement of retained earnings balance sheet statement of cash flows

Generally accepted accounting principles (GAAP) wants information to have: (Check all that apply).: conceptual history rules relevance faithful representation

relevance faithful representation

Assets = contains:

Cash + Accounts Receivable + Supplies + Equipment

Which of the following statements explain(s) how the accounting equation applies to businesses? (Check all that apply.)

-The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners. -The equation states that Assets = Liabilities + Equity. -The relation of assets, liabilities and equity is reflected in the equation. -The equation applies to all transactions and events.

The correct definition of a balance sheet includes which of the following statements? (Check all that apply.)

-The statement reports the financial position of a company at a point in time. -The statement reports the equality of the accounting equation at any point in time. -The statement reports assets, liabilities and equity at a point in time.

Boaz Company had beginning of year assets of $100 million and end of year assets of $120 million. Boaz's net income is $5 million. Calculate Boaz Company's return on assets. Round your answer to 1 decimal place.

4.5% $5 mil / [ ($100 mil

Identify what accounting is by selecting the correct statement.

Accounting is a system that identifies, records and communicates financial information.

Statement of retained earnings is:

Beginning of retained earnings + Net income - dividends = end retained earnings

The FASB conceptual framework consists of all of the following except: recognition and measurement qualitative characteristics objectives elements concepts

Concepts

Which statement below defines accounting?

It identifies, records, and communicates business transactions.

According to the fraud triangle, the three factors that must exist for a person to commit fraud include __, __, and __. (Check all that apply).: pressure motive justification opportunity rationalization

Pressure Opportunity Rationalization

All of the following are part of the FASB conceptual framework: (Select all that apply).: Recognition and measurement Principles Objectives Qualitative characteristics Elements Assumptions

Recognition and measurement Objectives Qualitative characteristics Elements

Which of the statement(s) below define(s) an asset? (Check all that apply.): Resources controlled by the business An amount owned An amount owed to a creditor Resources with expected future benefits An amount owed to the owners

Resources controlled by the business An amount owned Resources with expected future benefits

Identify which of the following lists of accounts would belong on the statement of retained earnings.

Retained earnings and Dividends

Income statement is:

Revenues - Expenses = Net Income

What are Generally Accepted Accounting Principles?

The concepts and rules that govern financial accounting practice.

Which of the following statements best represents the accounting equation?

The total of everything owned by a business must always equal the total of what the business owes to creditors and owners.