ACT 301 Module 1: Mastery Exercise
True or false? The advantage of accounting information is that it provides exact and completely reliable measures.
False
True or false? The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.
False
True or false? The periodicity assumption states that every economic entity can be separately identified and accounted for.
False
True or false?A major function of management is to provide the accountant with relevant and useful information.
False
Issuing shares of stock in exchange for cash is an example of a(n) ________.
Investing activity?
Generally accepted accounting principles ________.
are accounting rules that are recognized as a general guide for financial reporting
The right to receive money in the future is called a(n) ________.
Account receivable
Which of the following statements is true?
Amounts paid out as dividends are not expenses
What organization issues U.S. accounting standards?
FASB
The agency of the United States Government that oversees the U.S. financial markets is the ________.
Securities and Exchange Commission
Most companies use a(n) ________ rather than a retained earnings statement.
Statement of stockholders' equity
True or false? Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.
True
Debt securities sold to investors that must be repaid at a particular date some years in the future are called ________.
bonds payable
Ending retained earnings for a period is equal to beginning ________.
retained earnings + NI - Div?