Financial Accounting: Chapter 1 Quiz
Which of the following represents a resource of the company?
Assets
Which of the following equations correctly represents the fundamental accounting equation?
Assets= Liabilities + Stockholders Equity
Which financial statement reports a company's assets and liabilities?
Balance Sheet
Which financial statement shows that a company's resources equal claims to those resources?
Balance Sheet
The most lucrative activity of public accountants typically is:
Business consulting
The underlying foundation for the development of accounting standards and interpretation of accounting information is referred to as the:
Conceptual Framework
Which of the following describes the cost of selling to customers?
Expenses
Financial accounting and reporting standards in the United States are established primarily by the
Financial Accounting Standards Board
Which body has the primary responsibility for the establishment of Generally Accepted Accounting Principles?
Financial Accounting Standards Board (FASB)
Based on the introductory section of this chapter, which course is most like financial accounting?
Foreign Language
The body of rules and procedures that guide the measurement and communication of financial accounting information is known as
Generally Accepted Accounting Principles
The term GAAP stands for:
Generally Accepted Accounting Principles
In which financial statement does a company report its expenses?
Income Statement
In which financial statement does a company report its revenues?
Income Statement
Which financial statement conveys a company's ability to generate profits in the current period?
Income Statement
Which financial statement shows a company's revenues and expenses?
Income Statement
Which of the following best describes financial accounting?
Information measurement/communication process
Financial accounting provides information primarily to:
Investors and creditors
Why does financial accounting have a positive impact on our society?
It allows investors and creditors to redirect their resources to only successful companies
Financial accounting is often referred to as a:
Language of business
Amounts owed by the company are referred to as
Liabilities
Amounts owed to creditors are reported as:
Liabilities
Which of the following represents an obligation of the company?
Liabilities
Financial accounting helps with:
Maintaining records of multiple business transactions, Exchange of goods and services among individuals, Development of more complex societies.
Who ultimately is responsible for properly applying GAAP? The company's:
Management
Financial accounting serves which primary function(s)?
Measuring business activities and communicating business activities to interested parties
Which single piece of information best explains most companies' stock price performance?
Net Income
A company reports the following in its income statement: Total revenues of $500,000 and total expenses of $300,000. Which of the following is true? (Find net income)
Net income equals $200,000
A component/aspect of relevant accounting information includes:
Predictive Value
Public accounting firms refer to:
Professional service firms that focus on auditing and tax preparation
Sales of products or services are referred to as
Revenues
Based on the introductory section of this chapter, financial accounting can also be described as a way to
Tell the financial story of a company
The financial statement that shows the financial position of a company at a specific point in time is called the:
The Balance Sheet
The balance in retained earnings represents:
The amount of income earned over the company's life minus the dividends paid to shareholders over the company's life.
Which of the following best describes an important function of financial accounting?
To support the efficient distribution of society's resources
A company reports the following in its balance sheet: Total assets of $800,000 and total liabilities of $700,000. Which of the following is true? (subtract assets from liabilities)
Total stockholders equity equals $100,000
Traditional careers in public accounting include:
auditors, tax preparers/planners, and business consultants
Financial accounting information is essential to:
making good business decisions
The fundamental qualitative characteristics of accounting information identified by the FASB are:
relevance and faithful representation
Expenses represent:
the cost of providing products and services to customers