CH1 SB

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

False Reason: The fundamental activities are financing, investing, and operating activities.

what is contained in the statement of cash flows

Operating, investing, and financing activities

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

Relevance

what is contained in income statement

Revenues and expenses

The heading of an income statement should include which of the following? (Select all that apply.)

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

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

True

The statement of cash flows classifies items as

operating, investing, and financing.

Careers for accounting professionals typically include a choice between public and

private accounting

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.

Undistributed profits that have accumulated in the company over time are called

retained earnings

An income statement reports: (Select all that apply.)

revenues net income or loss expenses

The purpose of an income statement is to:

summarize the profit-generating activities that occurred during a particular reporting period

True or false: Financial information that is immaterial in amount or nature need not be reported in accordance with GAAP.

true Reason: Information that will not affect external users' decisions need not be reported in accordance with GAAP.

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

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

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

Accounting

The financial statement that displays a firm's financial position on a particular date is the

Balance Sheet

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

Confirmatory value Predictive value

Which of these would be found on a company's balance sheet? (Select all that apply.)

Equipment Notes payable Accounts receivable

is a term that refers to a code or moral system that provides criteria for evaluating right or wrong. (Enter one word per blank)

Ethics

___ Statements represent a company's primary means of communicating information to external users. (Enter one word per blank.)

Financial

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

Financial Accounting Standards Board.

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

In the heading

In financial accounting which of the following are the three types of business activities of a company?

Investing activities Operating activities Financing activities

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

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

Which of the following represents the net income earned by a corporation and not yet paid to shareholders?

Retained earnings

Which of the following line items appear on an income statement? (Select all that apply.)

Service revenue Supplies expense Salaries expense

The four primary financial statements published to provide information to external users include which of the following?

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

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

Utilities payable Common stock Accounts receivable

Accounting professionals:

are in high demand

Ending retained earnings is calculated as

beginning retained earnings + net income - dividends

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

cash receipts and cash disbursements during a period.

Stockholders' equity arises primarily from amounts invested by shareholders and amounts

earned by the corporation

Salaries already paid to employees for the month is a(n) Blank______ account that appears on the Blank______.

expense; income statement

Companies communicate information about their business activities primarily through

financial statements.

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

income statement

FASB

is the common abbreviation for the Board that currently establishes financial accounting and reporting standards in the U.S. (Enter the acronym.)

The accounting equation is: Assets =

liabilities + equity

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

management discussion and analysis notes disclosures.

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

materiality

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

materiality / material

The primary functions of accounting are to:

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

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

Annual Report

what is contained in balance sheet?

Assets, liabilities, and stockholders' equity

Which of the following appear on the statement of stockholders' equity? (Select all that apply.)

Dividends Net income Beginning balance of retained earnings

If revenues are less than expenses, a company has

a net loss.

The two sources of stockholders' equity are amounts

earned by the corporation paid in from shareholders

In our society, the two main functions of accounting are to

measure business activities. communicate information to investors and creditors.