Accounting

an assumption made in the preparation of the financial statements

Financial statements are prepared for a specific entity that is distinct from the entity's owners.

Which financial statement would you analyze to determine its operating performance for the past year

income statement

Which statement demonstrates the financial success or failure of the company over that specific period of time

income statement

best describes the term "expenses"

A decrease in resources resulting from the sale of goods or provision of service

Fundamental Accounting Equation

Assets = Equity + Liabilities

how is the balance sheet linked to other financial statements

Retained earnings from the statement of retained earnings is reported on the balance sheet

What does the phrase, "Revenue is recognized when earned" mean

Revenue is recorded in the accounting records and reported on the income statement when goods are sold and delivered to a customer

retained earnings of a company

The accumulated net income of a company that has not been distributed to owners in the form of dividends

economic resources are known as

assets

Which financial statement would you refer to in order to determine how many resources (assets) the company owns

balance sheet

You are a potential creditor and are concerned that a particular company you are ready to give a loan to might have too much debt. Which financial statement would provide you information needed in order to evaluate your concern?

balance sheet

liabilities are reported on the

balance sheet

reports an entity's financial position at a specific date

balance sheet

generally lends funds to a business entity and expects repayment of th

creditor

tribution of the net income of a corporation to its owners

dividends

relates to separating the reporting of business and personal economic transactions

economic entity assumptionq

Cash investments made by stockholders in exchange for capital stock in a business are reported on the statement of cash flows in

financing activities section

The statement of cash flows has which of the following economic activity categories

financing, investing, operating

"Revenues" are best described as

increases in resources resulting from the sale of goods or the provision of services.

Which of the following underlying assumptions for the conceptual framework is the reason the dollar is used in the preparationof financial statements?

monetary unit

The principle of conservatism is concerned with:

the avoidance of overstating assets or income in the preparation of financial statements

"Matching principle" is best described as

the principle that expenses should be recorded in the period resources are used to generate revenues. an increase in the financing activities.