Financial Accounting Exam 1
economic entity assumption
A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the...
owned by its stockholders
A business organized as a corporation is ...
transaction
Accountants refer to an economic event as a
balance sheet
All of the financial statements are for a period of time except the _____________ _______
economic entity assumption
Andre Dickinson, owner of Andre's Fine Wines, also owns a personal residence that costs $475,000. The market value of his residence is $625,000. During preparation of the financial statements for Andre's Fine Wines, the accounting concept most relevant to the presentation of Andre's home is
relevant
Financial information that is capable of making a difference in a decision is ___________
standards that indicate how to report economic events
Generally accepted accounting principles are
there must be an equal decrease in another asset
If an individual asset is increased, then...
stockholders' equity will increase
If services are rendered for credit, then...
convergence
In order to increase comparability, in recent years, the FASB and IASB have made efforts to reduce the differences between U.S.GAAP and IFRS through a process known as
cost principle
Martin Corporation purchased land in 2007 for $290,000. In 2013, it purchased a nearly identical parcel of land for $460,000. In its 2013 balance sheet, Martin valued these two parcels of land at a combined value of $920,000. By reporting the land in this manner, Martin Corp. has violated the
corporation
Owners enjoy limited liability in a _____________________
ownership claim on total assets
Stockholders' equity can be described as...
identification, recording, communication
The accounting process is correctly sequenced as ____________,_________________,__________________
monetary unit assumption
The assumption that the unit of measure remains sufficiently constant over time is part of the
the statement of financial position
The balance sheet is frequently referred to as
physical laws of nature
The body of theory underlying accounting is not based on
the same on the date of acquisition
The cost of an asset and its fair value are
cost
The cost principle requires that when assets are acquired, they be recorded at ___________
investment securities
The fair value principle is applied for _________ ___________
identify the alternatives and weigh the impact of each alternative on stakeholders
The final step in solving an ethical dilemma is to...
recognize an ethical situation and the ethical issues involved
The first step in solving an ethical dilemma is to...
luca pacioli
The origins of accounting are generally attributed to the work of
information about cash receipts and cash payments of a company
The primary purpose of the statement of cash flows is to report...
financial accounting standards board
The private sector organization involved in developing accounting principles is the
computers
The process of recording transactions has become more efficient because of _____________________
special memos for each class of external users
What techniques are not used by accountants to interpret and report financial information?
liabilities
existing debts and obligations
GAAP
generally accepted accounting principles
revenues
gross increases in stockholders' equity resulting from business activities
recording
Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?
preparing accounting reports
Communication of economic events is the part of the accounting process that involves
