Financial Accounting - Chapter 1 Quiz

corporation

A business organization that is legally separate from its owners is called a(n) _____________

dividend

A(n) ____________ is a distribution of net income to the stockholders of a corporation.

provides limited liability to stockholders

An advantage of the corporate form of organization is that a corporation

liability

Any amount owed to a creditor is classified in the balance sheet as a/an ______________

Assets, liabilities, and stockholders' equity Revenues and expenses Operating, investing, and financing activities

Balance sheet Income Statement Statement of Cash Flows (what are on each one)

financial statements

Companies communicate information about their business activities primarily through

the costs of doing business that are necessary to produce revenue

Expenses are:

stockholders' equity

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

revenues minus expenses

Net income equals:

sales of goods or services to customers

Revenues are:

expense; income statement

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

the owners' claims to resources of the corporation

Stockholders' equity is _____________________

statement of cash flows

The financial statement that provides information about cash receipts and cash disbursements for the period is the

corporation

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

accounting

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

Assets = Liabilities + Stockholders' equity

What is the accounting equation?

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

What relates to the information provided in an income statement?

Utilities payable Common stock Accounts receivable

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

Paying cash to buy equipment

Which of the following is an investing activity? Paying cash to buy equipment Paying for utilities Borrowing from the bank Receiving cash from customers

Notes payable Wages and salaries payable

Which of the following items are reported on the balance sheet as liabilities? Notes payable Supplies inventory Wages and salaries payable Cash received from a client

operating

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

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

the primary functions of accounting: