Accounting 2600 Review Question
The cost of operating assets is expensed over their individual useful life
According to accounting standards, Depreciation is a process in which
Increase expenses and assets
A debit will
Financing, Investing, Operating
Businesses engage in which three main categories?
Impacts the total book value of plant assets reported on the balance sheet and the amount of net income reported during a period
Capitalizing an expenditure rather than recording it as a revenue expenditure
The cost of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset
Depreciation is a process by which
Payments to shareholders of a company
Dividends are best described as
A violation of proper segregation of duties
Having one employee prepare company checks and sign those checks relates to which internal control activity?
Consolidation of departments within the accounting function
Internal control systems provide assurance in each of the following areas except
Increases in assets resulting from the sale of products or services
Revenues are best described as?
The work is completed on the job, whether or not the cash is received
Revenues are recorded when
Retained earnings and contributed capital (common stock)
Stockholders equity consists of?
Not be amortized but instead reviewed annually for any impairment
The current U.S. GAAP standards indicate that the costs of intangible assets with an indefinitely life such as goodwill should
Both sides of the accounting equation must be affected
The rules for recording transactions do NOT include what?
Assets increase and stockholders equity increase
What effect does "recognizing accrued interest revenue at the end of the accounting period" have on the accounting equation?
Liabilities decrease and stockholders equity increases
What effect does "recognizing revenue at the end of the accounting period for rent previously received in advance" have on the accounting equation for the insurance company?
They only occur when a transaction occurs
What is false in regards to expenses?
They may deny responsibility for certain financial reporting matters if they are not knowledgeable about the proper accounting procedures for those transactions
What is not a requirement of a company's top managers under the Sarbanes-Oxley act?
All publicly traded corporations must provide internal controls over financial reporting that guarantees financial accuracy
What is not a requirement of the Sarbanes-Oxley Act?
The name of the auditor
What is not shown in the heading of a financial statement?
Overstated income and understated liabilities
What would be the result on your balance sheet of recording unearned revenue as revenue?
When the expense is incurred, despite the payment of cash
When are expenses recorded?
Balance Sheet
Which financial statement would you refer to in order to analyze your debt and ownership
Balance Sheet
Which financial statement would you refer to in order to determine how much resources the company owned?