Chapter 1
Given the accounts below, choose all of the ones that affect equity. (Check all answers that apply.): Dividends Notes Payable Revenues Expenses Cash Common Stock Accounts Payable
Dividends Revenues Expenses Common Stock
An employee that is having trouble paying his personal bills might exhibit the following fraud factor:
Pressure
A graphical presentation of data to help in understanding their significance is called data
visualization
Sheldon Company had beginning retained earnings of $1,000, net income of $5,000, and dividends of $250. The ending balance in the retained earnings account is
$5,750 $1000 + $5000 - $$250 = $5750
+ Equity contains:
+ Common Stock - Dividends + Revenues - Expenses
Statement of cash flow is:
+/- Operating Cash flow +/- Investing Cash Flow +/- Financing Cash Flow = Change in Cash + is inflows (receipts) - Cash outflows (Payments)
When recording transactions into the accounting equation, which of the following statements are correct? (Check all that apply.)
-The accounting equation must always remain in balance. -After recording the transaction, total assets will always equal total liabilities plus equity.
Liabilities + contains:
Accounts payable
Identify the correct definition of an asset:
An asset is a resource that a business owns or controls
Describe the order in which a company prepares financial statements.
Income statement Statement of Retained Earnings Balance Sheet Statement of Cash Flows
Given that Jacob's Chocolates Company had beginning retained earnings of $4,000; net income during the period of $10,000; and dividends of $300 calculate the ending balance in the retained earnings account.
$13,700 $4000 + $10000 - $300 = $13700
Which of the following statements below lists the rules of entering transactions into the accounting equation?
The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.
A process of analyzing data to identify meaningful relations and trends is called data
analytics
Balance sheet is:
assets = liabilities + equity
An external user of accounting information
does not directly run the organization
The four financial statements are
income statement statement of retained earnings balance sheet statement of cash flows
Generally accepted accounting principles (GAAP) wants information to have: (Check all that apply).: conceptual history rules relevance faithful representation
relevance faithful representation
Assets = contains:
Cash + Accounts Receivable + Supplies + Equipment
Which of the following statements explain(s) how the accounting equation applies to businesses? (Check all that apply.)
-The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners. -The equation states that Assets = Liabilities + Equity. -The relation of assets, liabilities and equity is reflected in the equation. -The equation applies to all transactions and events.
The correct definition of a balance sheet includes which of the following statements? (Check all that apply.)
-The statement reports the financial position of a company at a point in time. -The statement reports the equality of the accounting equation at any point in time. -The statement reports assets, liabilities and equity at a point in time.
Boaz Company had beginning of year assets of $100 million and end of year assets of $120 million. Boaz's net income is $5 million. Calculate Boaz Company's return on assets. Round your answer to 1 decimal place.
4.5% $5 mil / [ ($100 mil
Identify what accounting is by selecting the correct statement.
Accounting is a system that identifies, records and communicates financial information.
Statement of retained earnings is:
Beginning of retained earnings + Net income - dividends = end retained earnings
The FASB conceptual framework consists of all of the following except: recognition and measurement qualitative characteristics objectives elements concepts
Concepts
Which statement below defines accounting?
It identifies, records, and communicates business transactions.
According to the fraud triangle, the three factors that must exist for a person to commit fraud include __, __, and __. (Check all that apply).: pressure motive justification opportunity rationalization
Pressure Opportunity Rationalization
All of the following are part of the FASB conceptual framework: (Select all that apply).: Recognition and measurement Principles Objectives Qualitative characteristics Elements Assumptions
Recognition and measurement Objectives Qualitative characteristics Elements
Which of the statement(s) below define(s) an asset? (Check all that apply.): Resources controlled by the business An amount owned An amount owed to a creditor Resources with expected future benefits An amount owed to the owners
Resources controlled by the business An amount owned Resources with expected future benefits
Identify which of the following lists of accounts would belong on the statement of retained earnings.
Retained earnings and Dividends
Income statement is:
Revenues - Expenses = Net Income
What are Generally Accepted Accounting Principles?
The concepts and rules that govern financial accounting practice.
Which of the following statements best represents the accounting equation?
The total of everything owned by a business must always equal the total of what the business owes to creditors and owners.