Chapter 1: A Framework for Financial Accounting
The primary functions of accounting are to:
- communicate information to decision makers - measure a company's activity
________ Statements represents a company's primary means of communicating information to external users.
Financial
Ending retained earnings is calculated as
beginning retained earnings + net income - dividends
Companies communicate information about their business activities primarily through
financial statements
The financial statement that summarized the profit-generating activities of a company during a particular period of time is the
income statement
Undistributed profits that have accumulated in the company over time are called
retained earnings
Stockholders' equity arises primarily from amounts invested by shareholders and amounts _________.
earned by the corporation
The four financial statements published to provide information to external users include which of the following?
1. Income statement 2. Statement of stockholders' equity 3. Balance sheet 4. Statement of cash flows
The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as __________
accounting
A business organization that is legally separate from its owners is called a ___________
corporation
The form of business organization where an entity is legally separate from its owners and issues shares of stock is a
corporation
Which financial statement reports revenues and expenses
income statement