accounting ch1
Generally Accepted Accounting Principles (GAAP) are best defined as:
Standards for presenting financial accounting information.
The stockholders' interest in a corporation is called:
Stockholders' equity.
The balance sheet depicts which of the following equations?
The balance sheet depicts which of the following equations?
utilities
amounts owed for utilities
liabilities
amounts owned
notes payable
borrow from the bank
partnership
business owned by 2 or more persons
sole proprietorship
business owned by a single person
statement of cash flows
change in cash as a result of operating, investing, + financing activities
statement of se
change in owners' claims to resources
salaries expense
cost of salaries
expenses
costs of selling products or services
dividends
distributions to stockholders distribute cash to stockholders
corporation
entity legally separate from its owners
Accounting can be defined as:
language of business. measurement/communication process. mathematics course.
stockholders' equity
owners' claims to resources
advertising expense
pay for cost of advertising
interest expense
pay for cost of interest
income statement
profitability of the company
objectives of financial accounting
provide info that is useful to investors + creditors provide info abt resources + claims to resources provide info to help users in predicting future cash flows
service revenue
provide services to customers sale of service to customers
equipment
purchase equipment for operation
buildings
purchase factory for operations
supplies
purchase supplies
accounts payable
purchase supplies on credit
cash
receive cash from customers cash available for use
balance sheet
resources equal creditors' + owners' claim to those resources
assets
resources of a company
revenues
sales of products or services
common stock
shares of ownership sold to investors
On January 1, Barton Brothers, Incorporated started the year with a $705,000 balance in Retained Earnings and a $608,000 balance in Common Stock. During the year, the company reported net income of $92,000, paid a dividend of $14,300, and issued more common stock for $25,500. What is total stockholders' equity at the end of the year?
$1,416,200
Use the following appropriate amounts to calculate net income: Revenues, $10,400; Liabilities, $4,900; Expenses, $4,700; Assets, $18,100; Dividends, $1,600.
$5,700
monetary unit
A common denominator is needed to measure all business activities.
Which of the following best describes revenue?
An amount recognized when the company sells products or provides services to a customer
The accounting equation is defined as:
Assets = Liabilities + Stockholders' Equity
The accounts that represent the resources of the company are called:
Assets.
The assumption that the assets and liabilities of the business are accounted for on the books of the company but not included in the records of the owner is the:
Economic entity assumption.
economic entity
Economic events can be identified with a particular economic body
The costs of providing goods and services to customers are referred to as:
Expenses.
GAAP is an abbreviation for:
Generally accepted accounting principles.
The assumption that a business will continue to operate into the future is the:
Going concern assumption.
securities and exchange commission
Group that has been given power by Congress to enforce the proper application of financial reporting rules for companies whose securities are publicly traded.
going concern
In the absence of information to the contrary, it is anticipated that a business entity will continue to operate indefinitely.
auditors
Independent intermediaries that help to ensure that management appropriately applies financial reporting rules in preparing the company's financial statements.
financial accounting standards board
Independent, private-sector group that is primarily responsible for setting financial reporting standards in the United States.
The accounts that typically include claims that must be paid by a specific date are called:
Liabilities.
Which of the following groups is not among the external users for whom financial statements are prepared?
Managers
What is the primary purpose of financial accounting?
Measure business activities and communicate those measures to external users to make decisions
international accounting standards board
Body that is attempting to develop a single set of high-quality, understandable global accounting standards.
The form of business organization that is legally separate from its owners is a:
Corporation.
The account type that represents payments to stockholders is called:
Dividends.
periodicity
The economic life of a company can be divided into artificial time intervals for financial reporting.
