Accounting Beginning Quiz

If assets are $99,000 and liabilities are $32,000, then equity equals:

$67,000

The statement of cash flows reports on cash flows for:

- Operating Activities - Investing Activities - Financial Activities

Primary Objective of Financial Accounting

- Provide financial statements to help external users analyze and interpret an organization's activities. - To serve the decision making needs of internal users - To report company finances to the IRS - To know what, when, and how much to produce (All of the Above)

Accounting is an information and measurement system that:

-identifies business activities - records business activities - communicates business activities - helps people make better decisions

An owner withdrawal has what effect on the financial statements?

A decrease in equity

Resources owned or controlled by a company that are expected to yield future benefits are:

Assets

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the financial statements

Assets decrease by $30,000; liabilities decrease by $30,000; no effect on equity.

Light company paid $5,000 in salaries to its employees. The salaries had not previously been recorded. What would be the effects of this transaction on the financial statements?

Assets decrease by $5,000; no effect on liabilities; equity decreases by $5,000

How would the financial statements of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?

Assets increase by $10,000; Equity (Revenue) increase by $10,000

Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the financial statements include:

Assets increase by $75,000 . liabilities increase by $75,000

How would the financial statements of Denver Company be affected by the owner investing $50,000 of cash and computer equipment with a value of $35,000?

Assets increase by $85,000; no effect on liabilities; equity increase by $85,000

A financial statement providing information that helps users understand a company's financial status, and which lists the types and amount of assets, liabilities, and equity as of a specific date, is called (an):

Balance Sheet

International Financial Reporting Standards (IFRS) are:

In the process of convergence with US GAAP.

Net income:

Is the excess of revenues over expenses

Creditors' claims on the assets of a company are called:

Liabilities

The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the:

Matching Principle

the accounting guideline that requires financial statement information to be supported by independent, unbiased evidence other than someone's beliefs or opinion is the:

Objectivity Principle

The Statement of Owner's Equity

Reports how equity changes over a period of time.

External users of accounting information include:

Shareholders. Customers. Government regulators. Creditors.

Revenues are

The gross increase in equity from a company's earning activities.