Exam #1

Which of the following financial statements shows a firm's financial position on a particular date?

Balance Sheet

A debit to Salaries Expense will:

Decrease stockholders' equity.

The first step for analyzing the effect of transactions is:

Determine one account in the accounting equation that will increase or decrease

Which of the following line items appear on an income statement? (Select all that apply.)

Expenses and Revenues

A balance sheet is a list of all accounts and their balances showing that debits equals credits.

False

Which of the following are attributes of FASB? (Select all that apply.)

Independence Full-time board members Private sector organization

Which of the following provides the most important support for the ethical foundation of accounting?

Legislation such as the Sarbanes-Oxley Act Accountants' Ethical Conduct

The FASB's objectives for financial accounting include which of the following? (Select all that apply.)

Provide useful information to investors and creditors Report on economic resources Help predict cash flows

Which of the following accounts normally has a credit balance?

Service Revenue.

Jack O'Rourke

Should shotgun a loko ASAP

The balance in retained earnings represents:

The amount of income earned over the company's life minus the dividends paid to shareholders over the company's life.

The theory or benchmark used by standard setters for creating a consistent set of financial reporting rules is referred to as

The conceptual framework

Arrange the steps for measuring transactions in the correct order.

Use source document to asses accounts effected Analyze impact of transaction on accounting equation Asses if it is a debit or credit Record in a journal Post to Ledger

In an adjusting entry for expenses incurred but not yet paid ______.

a liability is increasing since cash will be paid in the future due to the expense incurred

In recording an accrual adjusting entry to account for revenues earned but not yet collected, ______.

an asset is increased since cash will be collected at a later date

The purpose of a trial balance is to

assist in preparing adjusting entries. ensure debits equals credits.

The primary functions of accounting are to:

communicate information to decision makers. measure a company's activities.

The purpose of a conceptual framework in accounting is to

establish objectives and fundamental concepts on which to base rules

A chronological record of all economic events affecting a firm are recorded in a(n)

journal

The purpose of a general ledger is to

record a chronological listing of the accounts used by a particular company.