ACC 210 NCSU Chapter 1

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 appear(s) on the balance sheet?

Common stock Utilities payable Accounts receivable

Which financial statement reports revenues and expenses?

Income statement

Which of the following are attributes of FASB?

Independence Full-time board members Private sector organization

Which of these would be found on a company's balance sheet?

Notes payable Accounts receivable Equipment

Which of the following are financial statements?

Statement of stockholders' equity Income statement Balance sheet

The accounting equation is: Assets = Liabilities +

Stockholders' Equity

Which of the following items are found on a balance sheet?

Stockholders' equity Liabilities Assets

Which of the following knowledge and skills should an accounting professional possess?

Technical accounting knowledge Ability to work in teams Presentation skills Leadership skills

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

The purpose of a statement of cash flows is to provide information about the

cash receipts and cash disbursements during a period.

A business organization that is legally separate from its owners is called a(n)

corporation

Stockholders' equity arises primarily from amounts invested by shareholders and amounts ______.

earned by the corporation

The two sources of stockholders' equity are amounts ______.

earned by the corporation paid in from shareholders

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

An income statement reports:

expenses revenues net income or loss

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

_____ ______ represent a company's primary means of communicating information to external users.

financial statements

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

The three classifications on the statement of cash flows are cash flows from

investing activities. financing activities. operating activities

The statement of cash flows classifies items as

operating, investing, and financing.

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.

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

retained

The accumulated net income earned since the inception of the corporation and not yet paid to shareholders is referred to as

retained earnings

Retained earnings represents

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

True or false: Accounting professionals enjoy a wide variety of career opportunities

true

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

Financial Accounting Standards Board

The four financial statements published to provide information to external users include which of the following?

Balance Sheet Income Statement Statement of Cash Flows Statement of Stockholders' Equity

Accounting professionals:

are in high demand

Companies communicate information about their business activities primarily through

financial statements.

Information that best explains companies' stock price performance is reported on the

income statement

The financial statement that is most useful in explaining a company's stock price performance is the

income statement

A balance sheet lists the assets, _____, and stockholders' equity as of a specific date.

liabilities

the primary functions of accounting are to:

measure a company's activities communicate information to decision makers

In addition to the financial statements, which of the following must be included in the annual reports?

notes disclosures. management discussion and analysis.

The two main career paths in accounting are referred to as:

private public

An advantage of the corporate form of organization is that a corporation

provides limited liability to stockholders.

The purpose of an income statement is to:

summarize the profit-generating activities that occurred during a particular reporting period