Accounting Chapter 1
Return to questionItem 34Item 34 Which of the following accounts is not included in the liability section of the balance sheet?
Accounts receivable
The income statement reports all of the following except
Assets owned by a business
A financial statement providing information that helps users understand a company's financial status, and which lists the types and amounts of assets, liabilities, and equity as of a specific date, is called a
Balance sheet
Accounts payable appear on which of the following statements?
Balance sheet
The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the
Business entity assumption
To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the
Business entity assumption
Which of the following accounts is not included in the calculation of net income?
Cash
Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (or Dodd-Frank). Which of the following are two of the important provisions of Dodd-Frank?
Clawback and whistleblower
Clawback provisions and whistleblower provisions are components of which legislation?
Dodd-Frank Act
The accounting equation for Long Company shows an increase in its assets and an increase in its liabilities. Which of the following transactions could have caused that effect?
Equipment was purchased on credit
The Securities and Exchange Commission (SEC) has given the task of setting GAAP to the
FASB
The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the
Going-concern assumption
The group that sets international preferred accounting practices is called the
IASB
Rent expense appears on which of the following statements?
Income statement
The area of accounting aimed at serving the decision-making needs of internal users is
Managerial accounting.
The business entity assumption
Means that a business is accounted for separately from other business entities, including its owner.
The going concern assumption
Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold
The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the
Measurement (Cost) principle
When expenses exceed revenues, the result is called
Net loss
The expense recognition principle, also called the matching principle
Prescribes that a company record the expenses it incurred to generate the revenue reported
The full disclosure principle
Prescribes that a company report the details behind financial statements that would impact users' decisions
The materiality constraint
Prescribes that only information that would influence the decisions of a reasonable person need be disclosed
The time period assumption
Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods
The primary objective of financial accounting is to
Provide accounting information that serves external users.
The revenue recognition principle
Provides guidance on when a company must recognize revenue
External users of accounting information include all of the following except
Purchasing managers
The basic financial statements include all of the following except
Statement of Changes in Assets
The financial statement that shows the beginning balance of owner's equity; the changes in equity that resulted from new investments by the owner; net income (or net loss); withdrawals; and the ending balance, is the
Statement of owner's equity
Which of the following accounts is not included in the asset section of the balance sheet?
Wages expense
Revenue is properly recognized
When goods or services are provided to customers and at the amount expected to be received from the customer
Distributions of cash or other resources by a business to its owners are called
Withdrawals