Accounting Chapter 1 & 14 homework and practice

liabilities + stockholders equity =

Assets

WHich external user is this?- Is the company a good investment?

Investor

True or False. The accounting process includes the bookkeeping function.

True

True or False. The two most common types of external users

True

Match. dividends

stockholders' equity

Which external User is this?- Is the company able to pay its debts?

Creditor

True or False. Accounting information is used only by external users with a financial interest in a business enterprise.

False

True or False. Managerial accounting provides reports to help investors and creditors evaluate a company.

False

True or False. The three steps in the accounting process are identification, recording, and examination.

False

Which external user is this?- Is the company complying with tax laws?

Internal Revenue Service

As a part of your company's open information policy, you keep an updated spreadsheet listing the types of requests the company has had for accounting information. What types of categories would you include in this report?

Internal user requests would be divided by department *production, human resources, etc, etc.), and external user requests would be divided by type of organization )investor, creditor, government, etc.).

If a colleague asks you, as an accountant, why accounting is considered a financial information system, what explanation might you offer?

It identifies economic events, records business activity to maintain a history, and communicates financial information in reports for analysis.

Match. Buildings

assets

Match. Supplies

assets

Sally Harkins owns a bookstore and often takes cash out of the cash drawer to pay her apartment rent. Which of the following principles is Sally's violation? a) relevance principle b) Monetary unit assumption c) fair value principle d) economic entity assumption

d)economic entity assumption

Manufacturing costs include

direct materials, direct labor, and manufacturing overhead

The accounting rocess is correctly sequenced as

identification, recording, communication

A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)

indirect material

You are choosing between two investments, Flexon Industries and Tektron, Inc. Flexon Industries is a steady performer, perpetually growing earnings between 5% and 8% per year and projecting the same rate of growth for the next year. Tektron, Inc. is lately a top performer, growing earnings from 10% to 12% per year over the past three years and projecting the same rate of growth for the next year. However, the SEC is investigating Tektron, Inc. for potential questionable accounting practices for the past three years. As a potential investor, what would you do?

invest in Flexon Industries

Match. notes payable

liability

Match. salaries and wages payable

liability

Managerial accounting is also called

management accounting

Match. Amounts owed to bank

note payable

Which one of the following is NOT a cost element in manufacturing a product?

office salaries

A proprietorship is a business

owned by one person

Management accountants would not

prepare reports primarily for external users

Which external user is this?- Is the company operating within prescribed quidelines?

regulatory agency

managerial accounting is applicable to

service entities, manufacturing entities, not-for-profit entities

Which of the following events CANNOT be quantified into dollars and cents and recorded as an accounting transaction?

the appointment of a new CPA firm to perform an audit

Accountants refer to an economic event as a...

transaction

Which of the following is NOT a manufacturing cost category?

costs of goods sold

Match. Party to whom money is owed

creditor

A company has total assets valued at $5.7 million, total liabilities of $1.4 million, and retained earnings of $300,000. If the company wants 75% of its assets to be funded by stockholders' equity, it needs to ____________ its stockholders' equity..

decrease

Which one of the following is NOT considered a raw material cost?

partially completed motor engines for a motorcycle factory

A company buys investment securities for $1 million on January 1, 2022. On December 31, 2022, the market value of the securities has grown to $1.5 million. At what amount should the investment securities be reported on December 31, 2022, according to the historical cost principle? The fair value principle?

$1 million; $1.5 million

The following 2022 financial information pertains to Koosman Konsulting, established on January 1, 2022: 1. Started company by selling $250,000 of common stock on January 1, 2022. 2. Invested $100,000 cash in an office building and computer systems in 2022. 3. Generated and collected revenues of $125,000 cash in 2022 by providing consulting services. 4. Paid all $80,000 of expenses in cash in 2022. What was Koosman's cash flows from investing activities in 2022?

$100,000

The Natenal Fun Center has total assets of $225,000 and stockholders' equity of $100,000. What are total liabilities?

$125,000

Okkervil River Restaurant has total liabilities of $50,000 and stockholders' equity of $100,000. What are total assets?

$150,000

If a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck, assests will be increased by

$40,000

Picaresque Sails Co. has total assets of $140,000 and total liabilities of $45,000. What is stockholders' equity?

$95,000

Match. Amounts due from customers

account recievable

Match. Amounts owed to suppliers for goods and services purchased.

accounts payable

True or False. Internal users include human resources managers.

True

Owners enjoy limited liability in a

corporation