Chapter 1 - Principles of Accounting HW

Which items are found on an income statement? Revenues Expenses Dividends paid Equipment

Revenues Expenses

An income statement includes which of the following items?

Revenues Expenses Net income

Which of the following line items appear on an income statement?

Revenues Supplies expense

True or false: The statement of stockholders' equity indicates the changes in the various equity accounts.

True

The primary functions of accounting are to:

- measure business activities - communicate information to decision makers

In addition to the financial statements, which of the following must be included in the annual reports? press releases. corporate income tax returns. management discussion and analysis. notes disclosures.

- note disclosures - management discussion and analysis

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

- operating - investing - financing

The three most common forms of business organization are

- sole proprietorship - partnership - corporation

financial statements include

-income statement -statement of stockholders' equity -balance sheet

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

-measure business activities. -communicate information to investors and creditors.

Which of the following items are reported on the balance sheet as liabilities?

-notes payable -wages and salaries payable

Which of the following are operating activities?

-paying advertising expenses -paying salaries to employees -providing services to customers

Which of the following are operating activities? -providing services to customers -borrowing from creditors -purchasing plants and equipment -paying salaries to employees -paying advertising expenses

-providing services to customers -paying salaries to employees -paying advertising expenses

????? Keepers, Inc.'s balance sheet reported retained earnings as $10,000 at December 31, 2017 and $12,000 at the December 31, 2018. The income statement reported net income of $3,000 for the year ended December 31, 2018. Dividends declared for the year ended December 31, 2018 must equal $______.

1,000

Which of the following appear(s) on the balance sheet? Accounts receivable Utilities payable Common stock Salaries expense Net income

Accounts receivable Utilities payable Common stock

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

Balance Sheet

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

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

Which of the following appear on the statement of stockholders' equity?

Beginning balance of retained earnings Net income Dividends

Which of the following accounts are stockholders' equity accounts? Common stock Land Retained earnings Salaries payable Cash

Common stock Retained earnings

Who has the responsibility for preparing financial statements in accordance with generally accepted accounting principles?

Corporate management

The title of a balance sheet prepared for the calendar year 2018 includes: - for 2018 - December 31, 2018 - for the year ended December 31, 2018

December 31, 2018

Which of these would be found on a company's balance sheet? Equipment Depreciation expense Accounts receivable Sales revenue Notes payable

Equipment Accounts receivable Notes payable

__________ is the common abbreviation for the Board that currently establishes financial accounting and reporting standards in the U.S.

FASB

True or false: Dividends paid to shareholders are recorded on the income statement as an expense.

False

Generally accepted accounting principles are abbreviated as

GAAP

The purpose of the International Accounting Standards Board is to develop a single set of global accounting standards, which are referred to as

International Financial Reporting Standards.

Which of the following is an important purpose of GAAP? It leads to the highest reported net income. It leads to accurate financial statements. It facilitates comparison of financial information among companies. It increases free market competition among companies.

It facilitates comparison of financial information among companies.

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

Liabilities

Which of the following items are found on a balance sheet? Liabilities Dividends Assets Revenue Stockholders' equity

Liabilities Assets Stockholders' equity

Which of the following are attributes of FASB? Private sector organization Independence Public sector organization Full-time board members Part-time board members

Private sector organization Independence Full-time board members

The legal authority to set accounting and reporting standards for companies whose securities are publicly traded lies with the

SEC

Which of the following line items appear on an income statement? Salaries expense Supplies inventory Account payable Service revenue Cash Supplies expense

Salaries expense Service revenue Supplies expense

Dividends paid to shareholders is on which financial statement?

Statement of Shareholders' Equity

Which financial statement shows the changes in common stock and retained earnings?

Statement of Stockholders Equity

Dividends paid to shareholders is on which financial statement?

Statement of stockholders equity

The accounting equation is: Assets = Liabilities +

Stockholders Equity

The heading of an income statement should include which of the following?

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

The heading of a balance sheet for the 2018 fiscal period will include which of the following? The title "Balance Sheet" December 31, 2018 The name of the business For the Year Ended December 31, 2018

The title "Balance Sheet" December 31, 2018 The name of the business

True or false: The fact that all companies use the same accounting rules allows financial statement users to make meaningful comparisons among companies.

True

accounting

a system of maintaining records of a company's operations and communicating that information to decision makers

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

accounting

The fundamental model of business valuation is commonly referred to as the

accounting equation

operating

activities involve purchasing goods from suppliers, designing and manufacturing products, and selling products to customers.

liability

amounts owed to creditors are

A company owns an economic resource that will provide it with future benefits. This economic resource is -an asset. -a liability. -retained earnings. -net income.

an asset

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

annual report

Resources owned by a company are called

assets

accounting equation

assets=liabilities+stockholder's equities

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

balance sheet

The financial statement that reflects the accounting equation is referred to as the

balance sheet

Which financial statement presents the financial position of a company 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.

Which of the following accounts is on the statement of stockholders' equity?

common stock

The balance sheet shows that a company's resources equal _____ claims to those resources.

creditors claims plus owners'

The balance sheet shows that a company's resources equal _____ claims to those resources. creditors claims plus owners' creditors owners' creditors claims minus owners'

creditors claims plus owners'

A net loss ______ retained earnings

decreases

The purpose of the International Accounting Standards Board is to:

develop global accounting standards converge national standards with IFRS

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

earned by the corporation

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

ethics

Salaries already paid to employees for the month is a(n) ______ account that appears on the ______. expense; income statement liability; income statement revenue; balance sheet revenue; income statement liability; balance sheet

expense; income statement

True or false: The SEC has delegated the primary responsibility for setting accounting standards to the AICPA.

false

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

false

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

financial accounting standards board

Companies communicate information about their business activities primarily through

financial statements

The income statement is considered most useful for predicting

future profitability

The abbreviation GAAP stands for

generally accepted accounting principles.

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

income statement

The statement used to predict future profitability and a company's future cash-generating ability is the

income statement

Which financial statement reports revenues and expenses?

income statement

the purpose of an _________. ________. is to report the profit-generating activities of the firm during a period of time

income statement

The financial statement that is most useful in explaining a company's stock price performance is the income statement. balance sheet. statement of stockholders' equity.

income statement.

asset

is a resource, such as cash, land, or buildings, that is owned by a company.

The basic accounting equation

is referred to as the fundamental model of business valuation

Financial accounting should provide information that: predicts a company's future tax obligation is useful to investors and creditors in making decisions accurately predicts future income tells about economic resources, claims to resources, and changes in resources and claims helps to predict cash flows

is useful to investors and creditors in making decisions tells about economic resources, claims to resources, and changes in resources and claims helps to predict cash flows

Accounts that include the term "payable" typically are classified as stockholders' equity revenues assets liabilities

liabilities

Accounts that include the term "payable" typically are classified as

liability

If revenues are less than expenses, a company has

net loss

The two sources of stockholders' equity are amounts ______.

paid in from shareholders earned by the corporation

Many liabilities are referred to as ______ to indicate that amounts must be paid.

payables

revenue

the amount recorded as a result of the sale of products or services to customers

financial accountants

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

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

retained earnings

The accumulated net income earned since the inception of the corporation and not yet paid to shareholders is referred to as

retained earnings

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

retained earnings

Revenues are:

sales of goods or services to customers

The financial statement that provides information about cash receipts and cash disbursements for the period is the income statement. statement of cash flows. statement of retained earnings. balance sheet.

statement of cash flows

For a corporation, the owners' claims to the resources of a company are called

stockholder's equity

The purpose of an income statement is to:

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

corporation

the form of business organization where an entity is legally separate from its owners and issues shares of stock

Stockholders' equity is

the owners' claims to resources of the corporation.

The heading on the Statement of Stockholders' Equity includes which one of the following?

the period of time covered