Chapter 1 Smartbook

Which of the statements below defines an asset?

-An amount owned -resources controlled by the business -Resources with expected future benefits

Which list of accounts below, identifies only accounts that would appear on a balance sheet.

-Common stock, equipment -accounts payable -cash -equipment -retained earnings accounts payable

Return on assets is computed as net income divided by total assets

false

A process of analyzing data to identify meaningful relations and trends is called data

analysis

Generally Accepted Accounting Principles (GAAP) wants information to have:

relevance faithful representation

Which of the following statements explain(s) how the accounting equation applies to businesses?

-The equation states that Assets = Liabilities + Equity. -The equation applies to all transactions and events. -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 relation of assets, liabilities and equity is reflected in the equation.

the correct definition of a balance sheet

-The statement reports the financial position of a company at a point in time. -The statement reports assets, liabilities, and equity at a point in time. -The statement reports the equality of the accounting equation at any point in time.

All of the following are part of the FASB conceptual framework.

Objectives Recognition and measurement Qualitative characteristics Elements

What goes on the retained earnings

Retained earnings, dividends