Principles of Accounting

The two sources of stockholders' equity are amounts ______.

-paid in from shareholders -earned by the corporation

Which of the following are operating activities?

-paying salaries to employees -purchasing plant and equipment -paying advertise expending -provide services

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

Which of the following is the accounting equation?

Assets = Liabilities + Stockholders' equity

Who among the following lends money to a company and expects the company to repay the debt?

Creditor

National Company provides services to customers on account for $20,000. Which of the following journal entries is used to record this transaction?

Debit accounts receivable; credit service revenue.

On August 2, Garner Company provides services to a long-time customer for $50,000. Payment for this service is due on September 1. Which of the following journal entries is made to record this transaction on August 2?

Debit accounts receivable; credit service revenue.

Measuring business activities and reporting those measurements to external parties is the function of ______ accounting.

Financial

Which of the following includes the list of transactions affecting each individual account and the account's balance?

LEDGER

Claire purchases equipment for $10,000 by paying $3,000 in cash and borrowing $7,000 from the bank. The number of accounts affected by this transaction is

Reason: Three accounts are affected: equipment, notes payable, and cash.

When supplies are purchased on account, which of the following occurs?

a liability increases

The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as

accounting

The term___________________ cycle refers to the full set of procedures utilized to measure and communicate business transactions to external

accounting

The full set of accounting procedures used to measure and communicate business transactions is referred to as the

accounting cycle

Which of the following is used to record the summary of effects on one particular item?

an account

The account deferred revenue is used to record

an obligation to perform services in the future.

Which of the following items are found on a balance sheet? (Select all that apply.)

assets, liabilities, stockholer's equity

The financial statement that reflects the accounting equation is referred to as the

balance sheet

The fundamental activities are financing, investing, and operating activitie

business

A list of all account names used to record transactions of a company is referred to as the

chart of accounts

Which item is classified as an operating activity on the statement of cash flows?

collection of account receivable

Which item is classified as an operating activity on the statement of cash flows?

collection on account receivable

The two sources of stockholders' equity are amounts ______.

common stock and retained earnings

The balance sheet shows that a company's resources equal _____ __-claims to those resources.

creditors claims plus owners

Yeung Corp. purchases supplies on account. Recording this transaction will include a

debit to supplies

A distribution of net income to owners is called a(n)

dividend

A___________________ is a distribution of net income to the stockholders of a corporation

dividend

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) ______ account that appears on the ______.

expense, income statement

An income statement includes which of the following items? (Select all that apply.)

expenses net income revenues

Dividends paid to shareholders are recorded on the income statement as an expense

false

True or false: A ledger provides a chronological record of all transactions affecting the firm.

false

The three classifications on the statement of cash flows are cash flows from (Select all that apply.)

financing, investing, operating

Which of the following are among the basic assumptions underlying U.S. GAAP?

going concern monetary unit periodicity economic entity

The financial statement that summarizes the profit-generating activities of a company during a particular period of time is the

income statement

When a company earns net income, its retained earnings:

increase

___________________activities involve the buying and selling of land, buildings, and equipment used in the business.

investment

A chronological record of all economic events affecting a firm are recorded in a(n)

journal

The commonly used format for recording a transaction is referred to as a(n)

journal entry

A chart of accounts is a

list of all account names and numbers used by a company.

_____________________ accounting deals with the concepts and methods used to provide information to an organization's internal users. (Enter only one word.)

managerial

the primary functions of accounting are to

measure a company's activity, communicate information to decision makers

Accountants' primary information-related roles are to:

measure companies activities communicate measurements of companies activities

Which of the following appear on the statement of stockholders' equity? (Select all that apply.)

net income dividends beginning balance of retained earnings

Which of these would be found on a company's balance sheet? (Select all that apply.)

notes payable account receivable equipment

In financial accounting which of the following are the three types of business activities of a company?

operating investing financing

________________________activities involve purchasing goods from suppliers, designing and manufacturing products, and selling products to customers.

operational

Which of the following items are classified as financing activities on the statement of cash flows?

pay dividend issue stock

Profits earned by a company that have not been paid to stockholders are called

retained earnings

is the amount recorded as a result of the sale of products or services to customers.

revenue

The purpose of an account is to

summarize all transaction for that item

Which of the following line items appear on an income statement?

supplies expense revenues

Retained earnings represents

the total net income earned over the life of the company that has not been distributed as dividends.

True or false: Revenue is recorded when services are performed, whereas deferred revenue is recorded when cash is received from customers in advance before services are performed

true

A transaction will always affect at least ______ accounts.

two