Accouting ch 1
True or false: Net operating cash flow is a good indicator of a company's long-run cash-generating ability.
False, sometimes cash is exchanged in one period that relates to multiple periods so net operating cash flow is not necessarily a good indicator of a company's long-run cash-generating ability
Which of the following instances indicate net operating cash flow may not be a good predictor of long-run-cash-generating ability?
- a company pays cash to purchase a 2 year insurance policy- a customer pays for services provided in a prior period
The AICPA is the national professional organization for certified professional public________
ACCOUNTANTS
The financial reporting model used by the majority of profit oriented companies is ________ ACCOUNTING
ACCRUAL
As of July 1, 2009, the single source of nongovernmental U.S. GAAP is found in the ___________
Accounting Standards Codification.
Which accounting model best meets the primary goal of users of financial reporting?
Accrual basis
The difference between revenue and expenses when revenue is greater is called ___ _____
Blank 1: net Blank 2: income or profit
What accounting model produces a measure called net operating cash flow?
CASH BASIS
What basis of accounting measures the difference between cash receipts and cash payments from transactions related to providing goods and services to customers during a reporting period?
CASH BASIS
Under the accrual accounting model, the measure of resources sacrificed is called
Expense
In addition to issuing accounting standards, the FASB has formulated a conceptual _______________to provide an underlying theoretical and conceptual structure for accounting standards.
FRAMEWORK
The private sector organization that is currently responsible for setting accounting standards in the United States is the
Financial Accounting Standards Board.
The _____ has the authority to set accounting standards for companies, but has delegated the task to the private sector.
SEC
True or false: Resource inflows and outflows may not correspond to cash inflows and outflows.
TRUE
Which organization is currently the national professional organization for certified professional public accountants?
The AICPA
Who serves as an independent intermediary to help ensure that management has appropriately applied GAAP in preparing the financial statements?
auditors
blank -- basis accounting measures the difference between cash receipts and payments during a reporting period. (Enter only one word.)
cash
What accounting model produces a measure called net operating cash flow?
cash basis
Select all that apply Before issuing an Accounting Standards Update, the FASB undertakes a series of information-gathering steps including
deliberations written comments open hearings
Financial accounting is chiefly concerned with providing information to various____ users.
external or outside
True or false: Cash basis accounting is the required accounting method for most profit-oriented companies.
false
The ---- was established to set U.S. accounting standards and is the current standard setting body. (Use acronym.)
fasb
If the SEC does not agree with a standard issued by the private sector, it can
force a change in the standard.
The accrual accounting model is best able to achieve the goal of predicting cash flows. (Only one word per blank.)
future
The IASB's main objective is to develop a single set of standards that have what characteristics? (Select all that apply.)
high-quality enforceable understandable
Claire's revenues are greater than her expenses. Claire has net for the period. (Enter one word per blank)
income
Accrual income attempts to measure the resource inflows and outflows generated by the company's ---- during the reporting period.
operations
What are the three primary forms of business organizations?
partnership, corporation, and Sole proprietorship
The accrual accounting model's measure of resources provided by business operations is called
revenues