Account 101- A framewok for Financial counting
27. The purpose of a statement of cash flows is to provide information about the cash receipts and cash disbursements during a period. assets, liabilities, and stockholders' equity used during the period. assets used during the period. income and related expenses during the period
cash receipts and cash disbursements during a period.
3. Which of the following is a feature of the corporate form of business ownership? Unlimited liability Lower tax rates Limited resources Double taxation
Double taxation
36. Which of these would be found on a company's balance sheet? Notes payable Depreciation expense Equipment Sales revenue Accounts receivable
Notes payable Equipment Accounts receivable
46. Technical accounting skills represent the only skills required of accounting professionals______________ accounting
private
25. Which of the following financial statements shows a firm's financial position on a particular date? ncome statement Statement of stockholders' equity Statement of cash flows Balance sheet
Balance sheet
4. Which of the following are financial statements? (Select all that apply.) Statement of corporate responsibility Statement of stockholders' equity Statement of assets Income statement Balance sheet
Balance sheet Statement of stockholders' equity Income statement
6. The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as
accounting
7. The form of business organization where an entity is legally separate from its owners and issues shares of stock is a proprietorship. corporation. partnership
corporation.
47. To be useful for decision making, information should possess the fundamental qualities of relevance and________rpresentation
faithful, faithfulness, or faithfully
24. Ending retained earnings is calculated as beginning retained earnings + net income + dividends net income + dividends assets + net income - dividends beginning retained earnings + net income - dividends
beginning retained earnings + net income - dividends
13. An advantage of the corporate form of organization is that a corporation does not have to pay its creditors. provides limited liability to stockholders. is not taxed. is not regulated.
provides limited liability to stockholders. Reason: A corporation is taxed at the corporate level.
5. If stockholders' equity is $50,000 and liabilities are $78,000, then assets must equal: $28,000 $50,000 $78,000 $128,000
128,000
18. Ethics is best described as: A consensus among different measures. The rules of financial accounting. A code or moral system that provides criteria for evaluating right and wrong behavior. Accounting information that is complete, neutral, and free from error.
A code or moral system that provides criteria for evaluating right and wrong behavior.
20. The system that maintains records of a company's operations and then communicates that information to decision makers is referred to as____________
Accounting
4. Which of the following is an alternate form of the accounting equation? Assets − Liabilities = Stockholders' Equity Revenues − Expenses = Net Income Assets = Liabilities − Stockholders' Equity Expenses − Dividends = Net Income
Assets − Liabilities = Stockholders' Equity
42. ________is the common abbreviation for the Board that currently establishes financial accounting and reporting standards in the U.S.
Blank 1: FASB
32. The financial statement that displays a firm's financial position on a particular date is the_______________,__________________
Blank 1: balance Blank 2: sheet
11.The financial statement that summarizes revenues and expenses for a period of time is the----------, ___________________
Blank 1: income Blank 2: statement
37. Information that best explains companies' stock price performance is reported on the _____________, _______________
Blank 1: income Blank 2: statement
6. Expenses are best defined as: Amounts owed to creditors. Amounts the owners have invested in the business. Costs of providing products and services. Distributions to stockholders.
Costs of providing products and services.
21. Which of these would be found on a company's balance sheet? (Select all that apply.) Depreciation expense Equipment Accounts receivable Sales revenue Notes payable
Equipment Accounts receivable Notes payable
39.________________ is a term that refers to a code or moral system that provides criteria for evaluating right or wrong.
Ethics, Ethical conduct, Ethical, or Ethic
15. The organization responsible for creating a single set of global accounting standards is the: International Accounting Standards Board Internal Revenue Service Financial Accounting Standards Board Securities and Exchange Commission
Financial Accounting Standards Board
11. Net income appears in which two financial statements? Balance Sheet and Statement of Cash Flows Balance Sheet and Statement of Stockholders' Equity Income Statement and Statement of Cash Flows Income Statement and Statement of Stockholders' Equity
Income Statement and Statement of Stockholders' Equity
17. The FASB has explicitly stated the specific objectives of financial accounting. Which of the following is not one of those objectives? Helps to predict cash flows. Tells about economic resources, claims to resources, and changes in resources and claims. It is useful to investors and creditors in making decisions. It is useful to company management in making decisions.
It is useful to company management in making decisions.
26, The accounting equation is: Assets = ______ + Stockholders' Equity. Expenses Dividends Revenues Liabilities
Liabilities
12. You are reading a particular section of a bank's annual report. This section provides the bank's views about the impact of an upcoming regulation on the banking industry as a whole and the bank in particular. Which section of the annual report are you reading? The income statement The statement of stockholders' equity Management's discussion and analysis Note disclosures to the financial statements
Management's discussion and analysis
The accounting equation is: Assets = Liabilities + Revenues Creditors' Interest Net Income Retained Earnings Stockholders' Equity
Stockholders' Equity
14. Which of the following is an important indicator of a company management's ability to respond to business situations and the possibility of bankruptcy? Inventory Accumulated depreciation Total stockholders' equity Total liabilities
Total liabilities BC: (A company's debt level is an important indicator of management's ability to respond to business situations and the possibility of bankruptcy.)
7. Which of the following is not one of the four primary financial statements? Balance Sheet Trial Balance Income Statement Statement of Cash Flows
Trial Balance
1. Which of the following questions is most likely to be asked by a creditor? Will the company be capable of repaying its debt when it is due? What are the company's terms of credit with its suppliers? Will the company's stock increase in value? What is the amount of taxes owed to the government?
Will the company's stock increase in value?
2. Which of the following questions is most likely to be asked by an investor? What are the company's terms of credit with its suppliers? What is the amount of taxes owed to the government? Will the company be able to repay its debt when it is due? Will the company's stock increase in value?
Will the company's stock increase in value?
The two main functions of accounting______________Unavailable are to (1) measure business activities and (2) to communicate those measurements to investors and creditors. (Enter only one word.)
accounting or accountants
17. The financial statement that displays a firm's financial position on a particular date is the
balance sheet
A business organization that is legally separate from its owners is called a(n)____________________ (Enter one word per blank)
corporation, corporate, or corporations
31. A net loss ______ retained earnings. Multiple choice question. increases decreases has no effect on
decreases
45. A code or moral system that provides criteria for evaluating right and wrong is referred to as ethics. a dilemma system. a values model. standards.
ethics.
3. Companies communicate information about their business activities primarily through their tax return. financial statements. public relations announcements.
financial statements
18. The financial statement that summarizes the profit-generating activities of a company during a particular period of time is the income statement. statement of stockholders' equity. balance sheet. statement of cash flows.
income statement.
30. The financial statement that is most useful in explaining a company's stock price performance is the statement of stockholders' equity. income statement. balance sheet.
income statement.
44. The financial statement that is most useful in explaining a company's stock price performance is the statement of stockholders' equity. balance sheet. income statement.
income statement.
38. When a company earns net income, its retained earnings: increase are converted to cash are paid to stockholders decrease
increase
12. The primary functions of accounting are to: measure a company's activities. provide information to taxing authorities. increase a company's profitability. communicate information to decision makers. increase a company's stock market valuation.
measure a company's activities. communicate information to decision makers.
In our society, the two main functions of accounting are to measure business activities. report activities to government regulators. communicate information to investors and creditors. report net income to tax authorities.
measure business activities. communicate information to investors and creditors.
9. The two sources of stockholders' equity are amounts paid in from shareholders borrowed from banks borrowed from related companies earned by the corporatio
paid in from shareholders earned by the corporatio
49. 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 neutrality and materiality. materiality and consistency. relevance and faithful representation. cost and benefit.
relevance and faithful representation.
16. Profits earned by a company that have not been paid to stockholders are called___________earnings
retained
22. Undistributed profits that have accumulated in the company over time are called_______
retained
8. Use the following amounts to calculate net income: Assets, $165,000; Dividends, $9,000; Expenses, $61,000; Liabilities, $74,000; Revenues, $82,000. $12,000 $21,000 $30,000 $91,000
NI=R-E NI=82,00-61,00=21,00
41. Which of the following knowledge and skills should an accounting professional possess? Fluency in several languages Presentation skills Leadership skills Technical accounting knowledge Ability to work in teams
Presentation skills Leadership skills Technical accounting knowledge Ability to work in teams
10. The four financial statements published to provide information to external users include which of the following? statement of Stockholders' Equity Balance Sheet Statement of Cash Flows Statement of Assets Income Statement Statement of Business Activities
Statement of Stockholders' Equity Balance Sheet Statement of Cash Flows Income Statement
43. True or false: Accounting professionals enjoy a wide variety of career opportunities.
True
48. The two main career paths in accounting are referred to as SEC private tax public
private public
28. Which of the following appear(s) on the balance sheet? Accounts receivable Net income Common stock Utilities payable Salaries expense
Accounts receivable Common stock Utilities payable
23. Which of the following items are found on a balance sheet? (Select all that apply.) Assets Liabilities Revenue Stockholders' equity Dividends
Assets Liabilities Stockholders' equity
8. ---------------------Statements represent a company's primary means of communicating information to external users. (Enter one word per blank.)
Financial, Finance, or Financing
13. Which of the following best explains a company's stock price performance? Dividends Net income Accounts receivable Preferred stock
Net income BC: No single piece of company information better explains companies' stock price performance than does financial accounting net income
10. The statement of cash flows: Presents the financial position of a company at a point in time. Indicates if a company is profitable. Shows the net change in cash over a period of time. Reports the difference between revenues and expenses.
Presents the financial position of a company at a point in time.
9. The balance sheet: Presents the financial position of a company at a point in time. Indicates if a company is profitable. Shows the net change in cash over a period of time. Reports the difference between revenues and expenses.
Presents the financial position of a company at a point in time.
1. The primary functions of accounting are to: increase a company's stock market valuation. increase a company's profitability. provide information to taxing authorities. measure a company's activities. communicate information to decision makers.
measure a company's activities.
35. Which of the following are attributes of FASB? (Select all that apply.) Independence Private sector organization Public sector organization Full-time board members Part-time board members
Independence Private sector organization Full-time board members
34. The financial statement that provides information about cash receipts and cash disbursements for the period is the balance sheet. statement of retained earnings. income statement. statement of cash flows.
statement of cash flows.
15. Stockholders' equity arises primarily from amounts invested by shareholders and amounts ______. borrowed from banks earned by the corporation borrowed from investors received by customers
earned by the corporation
14. Retained earnings represents the total operating, investing, and financing activities of the company. the total net income earned over the life of the company that has not been distributed as dividends. the total cash the company has accumulated over its life. the net assets of the company during the current period.
the total net income earned over the life of the company that has not been distributed as dividends
16. What was the objective of the 1933 Securities Act? It set forth accounting and disclosure requirements for initial offerings of securities. It provided for the regulation of auditors and the types of services they furnish to clients. It paved the way for the creation of the Public Company Accounting Oversight Board. It created a government agency, the Securities and Exchange Commission (SEC).
It set forth accounting and disclosure requirements for initial offerings of securities.
29. A balance sheet lists the assets,_______, and stockholders' equity as of a specific date
liabilities or liability
5. An income statement reports: (Select all that apply.) amounts contributed by stockholders net income or loss revenues cash expenses
net income or loss revenues expenses