ch 1 accounting hw review
What financial statement shows a firm's financial position on a particular date?
balence sheet
Which items are found on an income statement?
- expenses (salaries expense) - revenues
In addition to the financial statements, what must be included in the annual reports?
- management discussion and analysis - notes disclosures
The two main career paths in accounting are referred to as:
- private - public
According to the conceptual framework, for accounting information to be relevant, what two qualities must it possess?
-Confirmatory value -Predictive value
Attributes of FASB
-Full-time board members -Independence -Private sector organization
What skills should an accounting professional possess?
-Presentation skills -Ability to work in teams -Technical accounting knowledge -Leadership skills
The heading of an income statement should include which of the following?
-The name of the business -The accounting period covered by the statement -The title of the financial statement
In our society, the two main functions of accounting are to...
-measure business activities. -communicate information to investors and creditors.
The private sector organization that is currently responsible for setting accounting standards in the United States is the...
Financial Accounting Standards Board(FASB)
True or false: Financial information that is immaterial in amount or nature need not be reported under GAAP.
True
The 2 main functions of ___________ are to measure business activities and communicate those measurements to investors and creditors.
accounting
Management discussion and analysis and note disclosures to the financial statements are included in the...
annual report
What is on a balance sheet?
assets, liabilities, stockholders equity (accounts receivable, common stock, notes payable, equipment, utilities payable)
The purpose of a statement of cash flows is to provide information about the...
cash receipts + cash disbursements during a period
The purpose of a statement of cash flows is to provide information about the..
cash receipts and cash disbursements during a period
Predictive value
consistently increasing income helps forecast the company's ability to generate future cash
A code or moral system that provides criteria for evaluating right and wrong is referred to as...
ethics
Salaries already paid to employees for the month is a(n) ______ account that appears on the ______.
expense; income statement
To be useful for decision making, information should possess the fundamental qualities of relevance and________________ representation.
faithful
True or false: Technical accounting skills represent the only skills required of accounting professionals
false
The three classifications on the statement of cash flows are cash flows from...
financing activities. operating activities. investing activities.
accounting professionals are..
high in demand
Information that best explains companies' stock price performance is reported in the...
income statement
The financial statement that is most useful in explaining a company's stock price performance is the...
income statement
When a company earns net income, its retained earnings:
increase
Financial information that may impact investors' and creditors' decisions is referred to as ________________ and must be reported under GAAP.
materiality
The impact of financial accounting information on investors' and creditors' decisions is closely related to the concept of:
materiality
Conformity value
positive is consistent with effectiveness of management
The hierarchy of qualitative characteristics of financial information require that, in order to be useful for decision making, information should possess the fundamental characteristics of...
relevance and faithful representation
Predictive value and confirmatory value are components of which fundamental qualitative characteristic?
relevances
The accumulated net income earned since the inception of the corporation and not yet paid to shareholders is referred to as
retained earnings
What represents the net income earned by a corporation and not yet paid to shareholders?
retained earnings
The financial statement that provides information about cash receipts and cash disbursements for the period is the...
statement of cash flows
Where is the time period covered by the income statement found?
the heading
True or false: Accounting professionals enjoy a wide variety of career opportunities
true