Accounting Review
Yes
Cash
Financial Accounting Standards Board (FASB)
Generally Accepted Accounting Principles (GAAP) are currently formulated by the.....
Disadvantage
Government regulation is expensive
Matching principle
Guides accounting for expenses, ensures that all expenses are recorded when they are incurred during the period, and matches those expenses against the revenues of the period
False
Rate of return on total assets measure the success a company has in using its assets to generate sales, while the asset turnover ratio measures a company's success in using its assets to earn income
Revenue recognition principle
Requires companies to record revenue when it satisfies each performance obligation
The sarbanes-oxley act
Requires that an outside auditor must evaluate a public company's internal controls
Yes
Retained earnings
No
Service revenue
Advantage
Stockholder's liability is limited
Outstanding check
Subtracted from the bank balance
NSF check
Subtracted from the book balance
Service charge
Subtracted from the book balance
Assets=liabilities + equity
The accounting equation
Income statement, statement of retained earnings, balance sheet
The adjusted trial balance is used to prepare the financial statements in which of these orders?
Maturity date
The date when the note receivable is due
Debit to bad debts expense
The entry to record a write-off of an uncollectible account when using the direct write-off method involves a_______.
Management's Discussion and Analysis (MD&A)
What part of the liberty's annual report is written by the company and could present a biased view of financial conditions and results?
First-in, first-out
Which inventory costing method assigns to ending merchandise inventory the newest-the most recent-costs during the period?
collections from customers
Which item does not appear on a statement of cash flows prepared by the indirect method
Accounts payable, revenues, and common stock
Which of the following lists below include accounts that all have a normal balance on the credit side?
Faithful Representation concept
Which of the following requires accounting information to be complete, neutral, and free from material error?
operating activities
current assets and liabilities
The main categories of cash flow activities are
operating, investing, and financing
Which of the following are true regarding the allowance method for recording uncollectibles?
1. Bad debt expense for the period is estimated by recording an adjusting entry at the end of the period 2. A contra asset account related to accounts receivable is used to hold the estimated amount of uncollectible accounts
What do closing entries accomplish?
1. Bring the retained earnings account to its correct ending balance 2. Zero out the revenues, expenses, and dividends 3. Transfer revenues, expenses, and dividends to the retained earnings account
Purposes of the statement of cash flows
1. Evaluate map
Which of the following are common required withholding deductions from an employees paycheck
1. Federal income tax 2. Social security tax
Accounting is an information system that
1. Measures business activities 2. Communicates the results to decision makers 3. Processed the information into reports
Which of the following are provisions included within the Satbanes-Oxley Act
1. Public companies must issue an internal control report describing management's responsibility for internal controls and the adequacy of internal controls 2. Penalties of 25 years in prison for securities fraud and 20 years for an executive making false sworn statements
Generally Accepted Accounting Principles (GAAP)
1. Rests on the conceptual framework that identifies the objectives, characteristics, elements, and implementation of financial statements 2. Creates the acceptable accounting practices
Other receivables
A miscellaneous category that includes any other type of receivable where there is a right to receive cash in the future
Notes recievable
A written promise to pay a specified amount of money at a particular future date
Deposit in transit
Added to the bank balance
Interest revenue earned
Added to the book balance
No
Advertising expense
Intangible
An asset with no physical form that is valuable Bc of the special rights it carried is called a (n)------- asset?
Furniture
Asset
Notes receivable
Assets
Prepaid insurance
Assets
Increase both assets and equity by $180
Assume that Global Cleaning Service performed cleaning services for a department store on account for $180. How would this transaction affect Global Cleaning Service's accounting equation?
Time period concept
Assumes that a business's activities can be sliced into small time segments and that financial statements can be prepared for specific periods.
Increase to Cash
Debit
Debit
Decrease to Accounts Payable
Credit
Decrease to Accounts Receivable
Credit
Decrease to office supplies
No
Dividends
Advantage
Entity can raise more money than a partnership or sole proprietorship
Advantage
Entity has continuous life
Common Stock
Equity
Dividends
Equity
Insurance Expense
Equity
Rent expense
Equity
Service Revenue
Equity
Disadvantage
Exposure to double taxation is evident
Credit
Increase to Common Stock
Credit
Increase to interest Revenue
Credit
Increase to notes Payable
Debit
Increase to prepaid rent
Debit
Increase to rent expense
Credit
Increase to unearned Revenue
Accounts Payable
Liability
Unearned Revenue
Liability
Non-cash investing and financing activities
Mountain water corp. issued common stock of $28,000 to pay off long term notes Payable of $28,000. In what section (s) would these transactions be recorded?
Disadvantage
Ownership and management are separated
The objective to financial reporting is to
Provide information useful for making investment and lending decisions
True
The normal balance side is the side that the balance appears and is always on the increase side of an account
Accounts receivable
The party to a credit transaction who takes on an obligation/payable
Debtor
The party to a credit transaction who takes on an obligation/payable
Perpetual and periodic
The two main inventory accounting systems are the_______, ________.
Advantage
Transfer of ownership is easy
