Chapter 1 - 3 (Exam One)
The company's operating cycle is longer than one year
A company may properly classify an asset that provides benefits for 15 months as a current asset if
A debit is used to decrease which of the following accounts?
Accounts payable
Liquidity
An asset that can quickly be turned into cash has the characteristic of
Traditional Careers in public accounting
Auditors, Tax prep/planners, Business Consultants
Which financial statement reports a company's assets and liabilities
Balance Sheet
A credit is used to decrease which of the following accounts?
Cash
Which activities are part of the operating cycle
Collecting cash from customers, Buying goods and services, Paying cash to suppliers
Which of the following is possible for a particular business transaction?
Decrease assets; decrease liabilities
Cost of selling to customers
Expenses
Does not represent an external business transaction
Expiration of an insurance policy over time is not part of the
Which body has the primary responsibility for the establishment of generally accepted Accounting Principles
Financial Accounting Standards Board (FASB)
Which financial statement shoes a company's revenues and expenses
Income Statement
The adjusted trial balance typically is used to prepare which financial statements
Income statements, Balanca Sheet, Statement of SHE
Financial Accounting
Information measurements / Communication process
Cash Flows Statement
Investing, Financing, Operating
Obligation of the company
Liabilities
Financial Accounting
Measuring a company business activities and communicating those measurements to external parties
Transferring the debit and credit information from a journal to individual accounts in the general ledger is referred to as
Posting
A components/aspect of relevant accounting information
Predictive Value
On a classified balance sheet, long-term assets may be reported in these sub-categories
Property, plant, and equipment, Intangible assets, Long-term investments
Which step in the process of measuring external transactions causes an increase in total liabilities?
Purchasing salaries expense for the current month
Purchasing office supplies on account for $100 is recorded as
Supplies credit 100, Accounts Payable debit 100
Describes an important function of financial accounting
To support the efficient distribution of society's resources
Which of the following is true about a trial balance?
Total debit amounts should always equal total credit amounts.
Deferred Revenue
Which of the following current liabilities does not involve the future payment of cash
Long Term Assets
Which of the following would typically be the first long-term asset category reported on a classified balance sheet?