Accounting Chapter 1

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Ace Electronics bought equipment for $4,000. Normally the equipment would have cost $4,500, but the supplies gave Ace a special discount. Ace's balance sheet should report equipment of...

$4,000

Who decides whether to lend money?

creditors

Who decides production and expansion?

managers

Expenses report what during the accounting period?

resources used to earn revenue

Who are viewed as owning the resources and as owing the debts of the business?

the corporation, not the owners

What information do assets provide to creditors and stockholders?

whether the company has sufficient resources to operate

The heading on the Statement of Stockholders' Equity includes what?

For the period ended December 31

What asset represents the amount customers owe for goods or services?

accounts receivable

resources owned by a company are called what?

assets

What is the accounting equation?

assets = liabilities + stockholders' equity

What does a balance sheet show?

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

Balance sheets report amounts...

at a specific point in time

What are the four financial statements?

balance sheet, income statement, statement of stockholders' equity, statement of cash flows

What information appears on the statement of stockholders' equity?

beginning balance of retained earnings, net income, dividends, ending balance of retained earnings

The main goal of an accounting system is to...

capture information about a business so that it can be reported to decision makers

Mauricio invested $30,000 in Pizza Aroma in exchange for its stock. Pizza Aroma now has what under shareholders' equity?

common stock

The sum of which two elements equals stockholders' equity?

common stock, retained earnings

Who decides whether to purchase products?

customers

What do most investors hope to get from their investments in a company's stock in addition a higher price for the stock?

dividends

Shareholders' equity arises primarily from amounts invested by shareholders and amounts...

earned and retained by the corporation

The two sources of stockholders' equity are amounts...

earned and retained by the corporation, paid in from shareholders

A(n) what is a cost of doing business that is necessary to earn a what?

expense; revenue

A net loss is reported when...

expenses are greater than revenues

Paying cash dividend to a stockholders is a(n)...

financing activity

What can affect common stock?

financing provided by owners, investments by owners

Which financial statement is a company's primary measure of profit?

income statement

When a company earns net income, its retained earnings...

increase

What involves the buying and selling of land, buildings, and equipment used in the business?

investing activities

Corporations have...

limited liability for its stockholders, continuity of life

Managerial accounting reports are used by the company's...

managers

Who are the internal decision makers that use accounting information to manage the operating, investing, and financing activities of the firm?

managers

Is common stock a liability?

no

Mauricio, the owner of Pizza Aroma, spent $2,500 of his own money to take his family to Disney World. Pizza Aroma's financial statements will report...

nothing about this trip

The balance sheet of a corporation reports...

only the results of the business's activities

What classifications are used to categorize cash inflows and cash outflows on the statement of cash flows?

operating, investing, financing

What does the income statement do?

reports how well the company performed during the accounting period, reports the profitability of the company for the accounting period, reports the revenues minus the expenses for the accounting period

Profits that have accumulated in the company over time are called what?

retained earnings

What are earned by selling goods or services to customers?

revenues

Net income equals...

revenues minus expenses

An income statement includes what items?

revenues, expenses, net income

Who are the external decision makers?

stockholders and creditors

Who decides the best place to purchase products for companies?

supply chain managers

What information do liabilities provide to creditors and stockholders?

whether there are excessive creditors' claims to the company's resources

What information do stockholders' equity provide to creditors and stockholders?

whether there is sufficient investment and cushion should the company close the doors of its business

Z Company bought land 20 years ago for $30,000. Over the last 20 years, the value of the land has doubled. The increase in the land's value....

will not be reported in Z Company's financial statements


Kaugnay na mga set ng pag-aaral

Chapter 4 magma, Igneous, rocks and intrusive Activity

View Set

Chapter 32 Disorders of Cardiac Function

View Set

Chapter 10 Quiz, Ch 11 Quiz, Ch 12 Quiz, Ch 13 Quiz

View Set

Horticulture sustainability exam 2

View Set