ACC 211-Study Guide

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

Pressure

Identify the correct definition of an asset

Something of value that a business owns or controls

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

visual representation

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.

$5 million/[($100 million + $120 million/)2] = 4.5%

True or false: Return on assets is computed as Net Income divided by Total Assets

False

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

$1,000 beginning balance + $5,000 net income - $250 dividends = $5,750.

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

analytics

An external user of accounting information

does not directly run the organization

A(n) _____ user of accounting information does not directly run the organization

external

Generally accepted accounting principles (GAAP) wants information to have:

faithful representation relevance

The _____ is the first financial statement to be prepared.

income statement

Sally Smith decided to start a sea shell business organized as a corporation. Her initial investment in the business consisted of $10,000 in cash in exchange for common stock. Record this transaction in the accounting equation of the new business by

increasing Cash; increasing Common Stock

According to the fraud triangle, the three factors that must exist for a person to commit fraud include __, __, and __.

opportunity pressure rationalization

The FASB conceptual framework consists of all of the following except:

concepts

Why does a business need accounting information?

Accounting records business transactions and communicates financial information.

To record the purchase of supplies for cash, the correct entry into the accounting equation would include an increase to (Equipment/Supplies/Cash) and a decrease to (Equipment/Supplies/Cash).

Blank 1: Supplies Blank 2: Cash

Given the accounts below, choose all of the ones that affect equity.

Common Stock Revenues Expenses Dividends

Which list of accounts below, identifies only accounts that would appear on a balance sheet.

Common Stock, Equipment, Accounts Payable

All of the following are part of the FASB conceptual framework:

Elements Objectives Qualitative characteristics Recognition and measurement

Given the list of accounts below, identify which of them would appear on a balance sheet.

Equipment Supplies Cash Retained earnings, 12/31 Accounts Payable

Which statement below defines accounting?

It identifies, records, and communicates business transactions.

Which of the statement(s) below define(s) an asset?

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

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.

What are Generally Accepted Accounting Principles?

The concepts and rules that govern financial accounting practice.

Which of the following statements explain(s) how the accounting equation applies to businesses?

The relation of assets, liabilities and equity is reflected in the equation. The equation applies to all transactions and events. 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 correct definition of a balance sheet includes which of the following statements? (Check all that apply.)

The statement reports assets, liabilities and equity at a point in time. 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.

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.

True or false: Dividends are resources paid to the stockholders.

True

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

visualization