ACC 210 Chapter 1 Smartbook Questions

Which of the following items are found on a balance sheet?

Assets, Liabilities, and Stockholders' Equity

Which of the following appear on the statement of stockholders' equity? (Choose all that apply.) Beginning balance of retained earnings Cash received during the accounting period Property, plant, and equipment Dividends Net Income

Beginning balance of retained earnings, dividends, and net income

Correctly match the terms with the descriptive example. Confirmatory value Predictive value

Confirmatory value: Positive income is consistent with effectiveness of management. Predictive value: Consistently increasing income helps forecast the company's ability to generate future cash.

Which of these would be found on a company's balance sheet?

Equipment Notes payable Accounts receivable

Which of these would be found on a company's balance sheet?

Equipment, Accounts receivable, and notes payable

Which items are found on an income statement?

Expenses and revenues

True or false: The fundamental activities of a business are selling activities and marketing activities.

False. The fundamental activities of a business are financing, investing , and operating activities.

__________ Statements represent a company's primary means of communicating information to external users.

Financial

The private sector organization that is currently responsible for setting accounting standards in the United States is the

Financial Accounting Standards Board (FASB)

In financial accounting, what are the three types of business activities of a company?

Financing activities, Investing activities, and Operating Activities

In financial accounting which of the following are the three types of business activities of a company? Investing activities Operating activities Building activities Financing activities Selling activities

Financing activities, Investing activities, and Operating activities

Which of the following aspects relate to the information provided an income statement?

Ability to earn a profit from its operations during the current period

Which of the following knowledge and skills should an accounting professional possess?

Ability to work in teams Leadership skills Technical accounting knowledge Presentation skills

The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as __________.

Accounting

Which of the following appear(s) on the balance sheet?

Accounts receivable Common stock Utilities payable

Which of the following appear(s) on the balance sheet?

Accounts receivable Utilities payable Common stock

According to the conceptual framework, for accounting information to be relevant, what two qualities must it possess?

Predictive value Confirmatory value

Profits earned by a company that have not been paid to stockholders are called _____ earnings.

Retained earnings

Which of the following represent the net income earned by a corporation and not yet paid to shareholders? Other comprehensive income Additional paid-in capital Retained earnings Paid-in capital

Retained earnings

The accounting equation is: Assets = Liabilities +

Stockholders' Equity

Which of the following line items appear on the income statement? (Choose all that apply.) Salaries payable Supplies expense Accounts receivable Cash Revenues Supplies

Supplies expense and revenue

The heading on an income statement should include:

The accounting period covered by the statement, the title of the financial statement, and the name of the business

Retained earnings represent

The total net income earned over the life of the company that has not been distributed as dividends.

The two main functions of __________ are to (1) measure business activities and (2) to communicate those measurements to investors and creditors.

accounting

Which of the following appears on the balance sheet? Net income Accounts receivable Salaries expense Utilities payable Common stock

accounts receivable, utilities payable, common stock

Management discussion and analysis and note disclosures to the financial statements are included in the

annual report

Management discussion and analysis and note disclosures to the financial statements are included in the __________ __________.

annual report

Accounting professionals:

are in high demand

Which of the following financial statements shows a company's financial position on a particular date?

balance sheet

The purpose of a statement of cash flows is to provide information about the

cash receipts and cash disbursements during a period.

A net loss ______ retained earnings.

decreases

A code or moral system that provides criteria for evaluating right and wrong is referred to as

ethics

__________ is a term that refers to a code or moral system that provides criteria for evaluating right or wrong.

ethics

To be useful for decision making, information should possess the fundamental qualities of relevance and _________ representation.

faithful

True or false: Technical accounting skills represent the only skills required of accounting professionals.

false (Other skills; e.g., interpersonal, and leadership are also important)

Companies communicate information about their business activities primarily through

financial statements

The three classifications on the statement of cash flows are cash flows

financing activities, investing activities, and operating activities

Information that best explains companies' stock price performance is reported in the _________ _________.

income statement

The financial statement that is most useful in explaining a company's stock price performance is the

income statement

The financial statement that reports the company's revenues and expenses over an interval of time is the

income statement

The financial statement that summarizes revenues and expenses for a period of time is the __________ __________.

income statement

The purpose a(n) __________ __________ is to report the profit-generating activities of a company over an interval of time.

income statement

A balance sheet lists the assets, __________, and stockholders' equity as of a specific date.

liabilities

Financial information that may impact investors' and creditors' decisions is referred to as __________ and must be reported under GAAP

materiality

The impact of financial accounting information on investors' and creditors' decisions is closely related to the concept of:

materiality

The primary functions of accounting are to:

measure a company's activities and communicate information to decision makers

In addition to the financial statements, which of the following must be included in the annual reports?

notes disclosures. management discussion and analysis.

The statement of cash flows classifies items as

operating, investing, and financing

The two sources of stockholders' equity are amounts __________.

paid in from shareholders and earned by the cooperation

Careers for accounting professionals typically include a choice between public and ___________ accounting

private

The two main career paths in accounting are referred to as:

private and public

Predictive value and confirmatory value are components of which fundamental qualitative characteristic?

relevance

The hierarchy of qualitative characteristics of financial information require that, in order to be useful for decision making, information should possess the fundamental characteristics of

relevance and faithful representation

An income statement reports: (choose all the are true) revenues amounts contributed by stockholders cash net income or net loss expenses

revenues expenses net income or net loss

What does an income statement report?

revenues, expenses, net income or net loss

The financial statement that provides information about cash receipts and cash disbursements for the period is the

statement of cash flows

True or false: Accounting professionals enjoy a wide variety of career opportunities.

true

Which of the following are attributes of FASB?

Full-time board members Independence Private sector organization

Where is the time period covered by the income statement found?

In the heading

The four primary financial statements published to provide information to external users include which of the following? Statement of Cash Flows Balance Sheet Statement of Assets Income Statement Statement of Stockholders' Equity Statement of Business Activities

Income Statement Statement of Stockholders' Equity Balance Sheet Statement of Cash Flows

What are the 4 primary financial statements?

Income Statement, Statement of Stockholders' Equity, Balance Sheet, and Statement of Cash Flows

Match each statement to the type of information contained in the statement. Income statement Statement of Cashflows Balance sheet

Income Statement: Revenues and Expenses Balance Sheet: Assets, Liabilities, and Stockholders' Equity Statement of Cash Flows: operating, investing, and financing activities

Which of the following are financial statements? (Choose all that apply.) Income statement Balance sheet Statement of stockholders' equity Statement of assets Statement of corporate responsibility

Income statement Balance sheet Statement of stockholders' equity

The accounting equation is: Assets = __________ + Stockholders' Equity.

Liabilities

Pizza Aroma generated $11,000 in revenues and had expenses of $6,000. Pizza Aroma's net income or loss is:

a net income of $5,000. In order to find net income or loss you must take the revenue and subtract the expenses, in this case, the revenues exceeded the expenses by 5,000 (11,000 - 6,000 = 5,000)

If revenues are less than expenses, a company has

a net loss