Quiz- Chapter 1 and 2

The balance sheet equation can be represented by:

*Assets=Liabilities+Stockholder's Equity *Assets - Liabilities=Stockholder's Equity *Net Assets= Stockholder's Equity

Which of the following accounting methods accomplishes much of the matching of revenues and expenses?

Accrual Accounting

The authoritative financial accounting standards-setting body in the United States is presently the:

Financial Accounting Standards Board (FASB)

Which of the following is an objective of financial reporting by business enterprises

Financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and changes in those resources and claims to them

Which of the following is not a principal form of business organization

Limited unregistered business

Which classification of accounting is most concerned with the use of economic and financial information to plan and control many of the activities of the entity?

Managerial accounting

Which of the following is true about the International Accounting Standards Board (IASB)?

Only the IASB has been working with the FASB in recent years to achieve convergence of International Financial Reporting Standards (IFRS) and U.S. GAPP and the goal of the IASB is to develop a single set of high quality, understandable, enforceable, and globally accepted financial reporting standards based upon clearly articulated principles are correct

Which of the following is not an example of a decision or informed judgement that a potential employee could make from accounting information?

Personnel turnover statistics (i.e., hiring and terminations)

Which of the following is not a transaction to be recorded in the accounting records of an entity?

Receipt of a plaque recognizing the firm's encouragement of employee participation in the United Way fund drive

Which of the following entities would not require accounting information pertaining to their economic activities?

Social clubs, not-for-profit entities, and state governments all require accounting information

Transactions are summarized in

The entity's accounts

The ethical concept of integrity means that an individual must:

attempt to be honest and forthright in dealings and communications with others

The ethical concept of independence means that an accountant employed:

by an auditing firm cannot own any stock in the company being audited

Retained Earnings represents:

cumulative net income that has not been distributed to stockholders as divdends

Major classifications of accounting activity would not include:

financial accounting, national accounting, cost accounting

The distinction between a current asset and other assets:

is based on when the asset is expected to be converted to cash, or used to benefit the entity

The income statement shows amounts for:

revenues, gains, expenses and losses

The Statement of Cash Flows:

shows how cash changed during the period

An unqualified auditors' opinion about an entity's financial statement:

states that they are presented in conformance with U.S. generally accepted accounting principles

The going concern concept refers to a presumption that:

the entity will continue to operate in the foreseeable future