ACCY 200 CQ1

The balance sheet might also be called:

Statement of Financial Position.

The time frame associated with a balance sheet is:

a point in time in the past.

The going concern concept refers to a presumption that:

the entity will continue to operate in the foreseeable future.

Which of the following accounting methods accomplishes much of the matching of revenues and expenses?

Accrual accounting.

An expanded version of the accounting equation could be:

Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues - Expenses - Dividends

When a firm purchases supplies for use in its business, and the cost of the supplies purchased is recorded as an asset, the following adjustment to recognize the cost of supplies used will probably be required:

Dr. Supplies Expense Cr. Supplies (option C)

The principle of full disclosure pertains to:

The entity fully discloses all necessary information to prevent a reasonably astute user of financial statements from being misled

Transactions are summarized in:

The entity's accounts.

Stockholders' equity refers to which of the following?

The ownership right of the stockholder(s) of the entity.

The time frame associated with an income statement is

a past period of time.

The balance sheet equation can be represented by:

a) Assets - Liabilities = Stockholders' Equity. b) Assets = Liabilities + Stockholders' Equity. c) All of these d) Net Assets = Stockholders' Equity.

Matching revenues and expenses refers to:

accurately reflecting the results of operations for a fiscal period

When a firm purchases supplies for its business:

an adjustment will probably be required as supplies are used.

Retained Earnings represents:

cumulative net income that has not been distributed to stockholders as dividends

Expenses are:

decreases in net assets resulting from usual operating activities.

A credit entry will:

increase a liability account

The effect of an adjustment on the financial statements is usually to:

increase the accuracy of both the balance sheet and income statement

A debit entry will:

increase the balance of an expense account

Revenues are:

increases in net assets from selling a product.

The distinction between a current asset and other assets:

is based on when the asset is expected to be converted to cash, or used to benefit the entity.

Accrual accounting:

is designed to match revenues and expenses.

A fiscal year:

is frequently selected based on the firm's operating cycle.

The purpose of the income statement is to show the:

net income or net loss for the period covered by the statement.

The income statement shows amounts for:

revenues, gains, expenses and losses.

The balance sheet of an entity:

shows amounts that are not adjusted for changes in the purchasing power of the dollar

The Statement of Cash Flows:

shows how cash changed during the period

Paid-in Capital represents:

the amount invested in the entity by the stockholders.

The principle of consistency means that:

the effect of any change in an accounting method will be disclosed in the financial statements or notes thereto