Accouting ch 1

True or false: Net operating cash flow is a good indicator of a company's long-run cash-generating ability.

False, sometimes cash is exchanged in one period that relates to multiple periods so net operating cash flow is not necessarily a good indicator of a company's long-run cash-generating ability

Which of the following instances indicate net operating cash flow may not be a good predictor of long-run-cash-generating ability?

- a company pays cash to purchase a 2 year insurance policy- a customer pays for services provided in a prior period

The AICPA is the national professional organization for certified professional public________

ACCOUNTANTS

The financial reporting model used by the majority of profit oriented companies is ________ ACCOUNTING

ACCRUAL

As of July 1, 2009, the single source of nongovernmental U.S. GAAP is found in the ___________

Accounting Standards Codification.

Which accounting model best meets the primary goal of users of financial reporting?

Accrual basis

The difference between revenue and expenses when revenue is greater is called ___ _____

Blank 1: net Blank 2: income or profit

What accounting model produces a measure called net operating cash flow?

CASH BASIS

What basis of accounting measures the difference between cash receipts and cash payments from transactions related to providing goods and services to customers during a reporting period?

CASH BASIS

Under the accrual accounting model, the measure of resources sacrificed is called

Expense

In addition to issuing accounting standards, the FASB has formulated a conceptual _______________to provide an underlying theoretical and conceptual structure for accounting standards.

FRAMEWORK

The private sector organization that is currently responsible for setting accounting standards in the United States is the

Financial Accounting Standards Board.

The _____ has the authority to set accounting standards for companies, but has delegated the task to the private sector.

SEC

True or false: Resource inflows and outflows may not correspond to cash inflows and outflows.

TRUE

Which organization is currently the national professional organization for certified professional public accountants?

The AICPA

Who serves as an independent intermediary to help ensure that management has appropriately applied GAAP in preparing the financial statements?

auditors

blank -- basis accounting measures the difference between cash receipts and payments during a reporting period. (Enter only one word.)

cash

What accounting model produces a measure called net operating cash flow?

cash basis

Select all that apply Before issuing an Accounting Standards Update, the FASB undertakes a series of information-gathering steps including

deliberations written comments open hearings

Financial accounting is chiefly concerned with providing information to various____ users.

external or outside

True or false: Cash basis accounting is the required accounting method for most profit-oriented companies.

false

The ---- was established to set U.S. accounting standards and is the current standard setting body. (Use acronym.)

fasb

If the SEC does not agree with a standard issued by the private sector, it can

force a change in the standard.

The accrual accounting model is best able to achieve the goal of predicting cash flows. (Only one word per blank.)

future

The IASB's main objective is to develop a single set of standards that have what characteristics? (Select all that apply.)

high-quality enforceable understandable

Claire's revenues are greater than her expenses. Claire has net for the period. (Enter one word per blank)

income

Accrual income attempts to measure the resource inflows and outflows generated by the company's ---- during the reporting period.

operations

What are the three primary forms of business organizations?

partnership, corporation, and Sole proprietorship

The accrual accounting model's measure of resources provided by business operations is called

revenues