CH1 SB
True or false: The fundamental activities of a business are selling activities and marketing activities.
False Reason: The fundamental activities are financing, investing, and operating activities.
what is contained in the statement of cash flows
Operating, investing, and financing activities
Predictive value and confirmatory value are components of which fundamental qualitative characteristic?
Relevance
what is contained in income statement
Revenues and expenses
The heading of an income statement should include which of the following? (Select all that apply.)
The title of the financial statement The accounting period covered by the statement The name of the business
True or false: Accounting professionals enjoy a wide variety of career opportunities.
True
The statement of cash flows classifies items as
operating, investing, and financing.
Careers for accounting professionals typically include a choice between public and
private accounting
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.
Undistributed profits that have accumulated in the company over time are called
retained earnings
An income statement reports: (Select all that apply.)
revenues net income or loss expenses
The purpose of an income statement is to:
summarize the profit-generating activities that occurred during a particular reporting period
True or false: Financial information that is immaterial in amount or nature need not be reported in accordance with GAAP.
true Reason: Information that will not affect external users' decisions need not be reported in accordance with GAAP.
Which of the following aspects relate to the information provided in an income statement?
Ability to earn a profit from its operations during the current period
The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as ___
Accounting
The financial statement that displays a firm's financial position on a particular date is the
Balance Sheet
According to the conceptual framework, for accounting information to be relevant, what two qualities must it possess?
Confirmatory value Predictive value
Which of these would be found on a company's balance sheet? (Select all that apply.)
Equipment Notes payable Accounts receivable
is a term that refers to a code or moral system that provides criteria for evaluating right or wrong. (Enter one word per blank)
Ethics
___ Statements represent a company's primary means of communicating information to external users. (Enter one word per blank.)
Financial
The private sector organization that is currently responsible for setting accounting standards in the United States is the
Financial Accounting Standards Board.
Where is the time period covered by the income statement found?
In the heading
In financial accounting which of the following are the three types of business activities of a company?
Investing activities Operating activities Financing activities
Which of the following knowledge and skills should an accounting professional possess?
Leadership skills Presentation skills Technical accounting knowledge Ability to work in teams
Which of the following represents the net income earned by a corporation and not yet paid to shareholders?
Retained earnings
Which of the following line items appear on an income statement? (Select all that apply.)
Service revenue Supplies expense Salaries expense
The four primary financial statements published to provide information to external users include which of the following?
Statement of Cash Flows Income Statement Statement of Stockholders' Equity Balance Sheet
Which of the following appear(s) on the balance sheet?
Utilities payable Common stock Accounts receivable
Accounting professionals:
are in high demand
Ending retained earnings is calculated as
beginning retained earnings + net income - dividends
The purpose of a statement of cash flows is to provide information about the
cash receipts and cash disbursements during a period.
Stockholders' equity arises primarily from amounts invested by shareholders and amounts
earned by the corporation
Salaries already paid to employees for the month is a(n) Blank______ account that appears on the Blank______.
expense; income statement
Companies communicate information about their business activities primarily through
financial statements.
Information that best explains companies' stock price performance is reported in the
income statement
FASB
is the common abbreviation for the Board that currently establishes financial accounting and reporting standards in the U.S. (Enter the acronym.)
The accounting equation is: Assets =
liabilities + equity
In addition to the financial statements, which of the following must be included in the annual reports?
management discussion and analysis notes disclosures.
The impact of financial accounting information on investors' and creditors' decisions is closely related to the concept of:
materiality
Financial information that may impact investors' and creditors' decisions is referred to as ___ and must be reported under GAAP
materiality / material
The primary functions of accounting are to:
measure a company's activities. communicate information to decision makers.
Management discussion and analysis and note disclosures to the financial statements are included in the
Annual Report
what is contained in balance sheet?
Assets, liabilities, and stockholders' equity
Which of the following appear on the statement of stockholders' equity? (Select all that apply.)
Dividends Net income Beginning balance of retained earnings
If revenues are less than expenses, a company has
a net loss.
The two sources of stockholders' equity are amounts
earned by the corporation paid in from shareholders
In our society, the two main functions of accounting are to
measure business activities. communicate information to investors and creditors.