Accounting Practice Set 1
Which of the following is not a balance sheet item?
Revenues.
resources owned
assets
Distributions to stock holders
dividends
costs of selling products or services
expenses
Profitability of the company
income statement
owners claim to resources
stockholders equity
Financial reporting objectives do include:
-Useful to investors and creditors in making decisions. -Helpful to investors in predicting cash flows. -That tells about a company's economic resources and claims to those resources.
Which of the following statements is NOT correct about the financial statements?
A balance sheet reports assets, liabilities, revenues, and expenses.
The equation best describing the balance sheet is:
Assets = Liabilities + Stockholders' Equity.
Independent intermediaries that help to ensure that management appropriately applies financial reporting rules in preparing the company's financial statements.
Auditors
Which financial statement reports a company's retained earnings?
Balance Sheet
Independent, private-sector group that is primarily responsible for setting financial reporting standards in the United States.
Financial Accounting Standards Board
The financial statement(s) that record activity over an interval of time is (are) the:
Income statement and statement of cash flows.
Expenses are shown in which of the following statements?
Income statement.
Body that is attempting to develop a single set of high-quality, understandable global accounting standards.
International Accounting Standards Board
The primary focus for financial accounting information is to provide information useful for:
Investing Decisions and Credit Decisions
Which financial accounting number impacts stock prices more than any other single piece of information?
Net income.
Group that has been given power by Congress to enforce the proper application of financial reporting rules for companies whose securities are publicly traded
Securities and Exchange Commission
Change in owners' claims to resources.
Statement of stockholder's equity
Select whether the definition provided is true or false. Accounting can be defined as:
The language of business and a measurement/ communication process
Financial reporting objectives do not include providing information:
To determine market values, assess profit potential, and evaluate management.
Accounting is not
a math course
Resources equal creditors' and owners' claims to those resources
balance sheet
Entity legally separate from its owners
corporation
amounts owed
liabilities
Eagle Corp. operates Magnetic Resonance Imaging (MRI) clinics throughout the Northeast. At the end of the current period, the company reports the following amounts: Assets = $39,100; Liabilities = $22,300; Dividends = $1,810; Revenues = $10,300; Expenses = $7,500.
net income: 2800 stockholder's equity: 16,800
Business owned by two or more people
partnership
Amounts earned from sales of products or services
revenue
Business owned by a single person
sole proprietorship
Change in cash as a result of operating, investing, and financing activities
statement of cashflows
