College Accounting: A Contemporary Approach - Ch 01 and 02 - The Language of Buisness and Analyzing Business Accounts - Quiz

Total assets of Douglas Fuhr Furniture Co. are $36,000 and the total liabilities are $12,000. What is the amount of the owner's equity?

$24,000

If a business issues a check for $100 to purchase office supplies, analyze the effect on the accounting equation.

Total Property will remain the same

Amounts that a business must pay in the future are known as

accounts payable.

All financial statements submitted to the SEC by publicly owned corporations must include an auditor's report prepared by

an independent certified public accountant.

The rent paid for future months is a(n)

asset

The owner's investment or equity in a business is called

capital

The Financial Accounting Standards Board is responsible for

developing generally accepted accounting principles.

A firm issues periodic reports called

financial statements.

Owners and managers need financial information in order to

make decisions.

The corporations whose stock can be bought and sold on stock exchanges and in over-the-counter markets are referred to as

publicly owned corporations.

The government agency that has final authority over the financial reporting of publicly owned corporations is

the Securities and Exchange Commission.

The balance sheet shows

the financial position of a business at a given time.

A net loss results

when expenses are greater than revenue.

A form of the partnerships business entity is

LLP

An example of an economic entity is

a business.

Identify the form of business that is considered a separate legal entity.

a corporation

When equipment is purchased on credit, assets and liabilities _________.

assets and liabilities increase.

When the owner invests cash in a business, ________ and _______ increase.

assets and owner's equity increase.

When the owner withdraws cash for personal use, assets _______ and owner's equity ______.

assets decrease and owner's equity decreases.

Examples of assets are:

cash and accounts receivable.

Ginger Yale Ice Company receives money from a customer on account. Recording this transaction will

increase Cash.

The financial affairs of a business and the financial affairs of the owners should be

kept totally separate.

Identify the advantages of forming a business as an S Corporation.

owners avoid double taxation and owners have limited liability

Which financial statement is reported as of a specific date?

Balance Sheet

An independent accountant who provides accounting services to the public for a fee is a

CPA

Assets and liabilities are reported on

the balance sheet.

Owners are not personally responsible for the debts of the business if the form of business organization is

the corporation.

The form of a business organization that is not affected by the withdrawal or death of an owner and can continue forever is

the corporation.