AC 210 learnsmart chapter 1

Which of the following characteristics are needed in order for financial information to be useful?

1Faithful representation 2Relevance

A net loss will ______.

decrease retained earnings

Which of the following statements are true about the balance sheet. (Select all that apply.) Multiple select question.

1 It reports the economic resources and claims on those resources. 2 It reports the assets, liabilities and stockholders' equity at a point in time.

A corporation earns profits for its stockholders by ______.

1 providing services at more than cost 2 selling goods at more than their cost

Which of the following are ways of expressing the basic accounting equation? (Select all that apply.)

1. Assets = Liabilities + Stockholders' Equity 2. Assets - Liabilities = Stockholders' Equity 3. Assets - Stockholders' Equity = Liabilities

When a company is owed for sales made to customers on credit, the asset called: Multiple choice question.

Accounts Receivable will be reported on the balance sheet.

The order in which liabilities are reported on the balance sheet is based on when the liability is:

expected to be paid or settled.

The order in which assets are reported on the balance sheet is based on when the asset is ______.

expected to be used or turned into cash

True or false: Net income equals the net amount of cash collected during the accounting period. True false question.

false

True or false: The order of the heading of an income statement indicates the name of the statement first, the period of time covered, and the name of the company third. True false question.

false

The underlying rules of accounting in the US are called ______.

generally accepted accounting principles (GAAP)

The unit-of-measure assumption states that ______. Multiple choice question.

results of business activities should be reported in an appropriate monetary unit

True or false: A fiscal year can end on a date other than December 31. A calendar year ends on December 31.

true

Financial information is enhanced when it is ______. (Check all that apply.) Multiple select question. understandable future-oriented verifiable timely on a cash-basis comparable

understandable verifiable timely comparable

The unit of measure concept is the idea that a company should report its financial results on its financial statements using ______. Multiple choice question.

a single monetary unit, such as the US dollar

The heading of a balance sheet should include which of the following? (Check all that apply.) Multiple select question.

1. the name of the business 2. the title "balance sheet" 3. The date (at Dec. 31, 2020)

The heading of an income statement should include ______. (Select all that apply.) Multiple select question.

1. the title "Income Statement" 2. the name of the business 3. the accounting period covered by the statement

Which of the following statements are true regarding the income statement? Income statements ______.

1are sometimes called the statement of operations 2report revenues minus expenses

Which group is responsible for creating the US GAAP? Multiple choice question.

Financial Accounting Standards Board (FASB)

True or false: Creditors would like a company that owes them money to have a large positive cash flow from operating activities.

True

Which of the following are reported on a balance sheet? retained earnings revenues stockholders' equity cash assets expenses liabilities

answer: retained earnings stockholders' equity cash assets liabilities

The balance sheet balances when ______.

assets equal liabilities plus stockholders' equity

Creditors want to see that a company that owes them money has ______. Multiple choice question.

assets that are greater than its liabilities

A balance sheet shows ______.

assets, liabilities, and stockholders' equity at a single point in time