ch 1 accounting hw review

What financial statement shows a firm's financial position on a particular date?

balence sheet

Which items are found on an income statement?

- expenses (salaries expense) - revenues

In addition to the financial statements, what must be included in the annual reports?

- management discussion and analysis - notes disclosures

The two main career paths in accounting are referred to as:

- private - public

According to the conceptual framework, for accounting information to be relevant, what two qualities must it possess?

-Confirmatory value -Predictive value

Attributes of FASB

-Full-time board members -Independence -Private sector organization

What skills should an accounting professional possess?

-Presentation skills -Ability to work in teams -Technical accounting knowledge -Leadership skills

The heading of an income statement should include which of the following?

-The name of the business -The accounting period covered by the statement -The title of the financial statement

In our society, the two main functions of accounting are to...

-measure business activities. -communicate information to investors and creditors.

The private sector organization that is currently responsible for setting accounting standards in the United States is the...

Financial Accounting Standards Board(FASB)

True or false: Financial information that is immaterial in amount or nature need not be reported under GAAP.

True

The 2 main functions of ___________ are to measure business activities and communicate those measurements to investors and creditors.

accounting

Management discussion and analysis and note disclosures to the financial statements are included in the...

annual report

What is on a balance sheet?

assets, liabilities, stockholders equity (accounts receivable, common stock, notes payable, equipment, utilities payable)

The purpose of a statement of cash flows is to provide information about the...

cash receipts + cash disbursements during a period

The purpose of a statement of cash flows is to provide information about the..

cash receipts and cash disbursements during a period

Predictive value

consistently increasing income helps forecast the company's ability to generate future cash

A code or moral system that provides criteria for evaluating right and wrong is referred to as...

ethics

Salaries already paid to employees for the month is a(n) ______ account that appears on the ______.

expense; income statement

To be useful for decision making, information should possess the fundamental qualities of relevance and________________ representation.

faithful

True or false: Technical accounting skills represent the only skills required of accounting professionals

false

The three classifications on the statement of cash flows are cash flows from...

financing activities. operating activities. investing activities.

accounting professionals are..

high in demand

Information that best explains companies' stock price performance is reported in the...

income statement

The financial statement that is most useful in explaining a company's stock price performance is the...

income statement

When a company earns net income, its retained earnings:

increase

Financial information that may impact investors' and creditors' decisions is referred to as ________________ and must be reported under GAAP.

materiality

The impact of financial accounting information on investors' and creditors' decisions is closely related to the concept of:

materiality

Conformity value

positive is consistent with effectiveness of management

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...

relevance and faithful representation

Predictive value and confirmatory value are components of which fundamental qualitative characteristic?

relevances

The accumulated net income earned since the inception of the corporation and not yet paid to shareholders is referred to as

retained earnings

What represents the net income earned by a corporation and not yet paid to shareholders?

retained earnings

The financial statement that provides information about cash receipts and cash disbursements for the period is the...

statement of cash flows

Where is the time period covered by the income statement found?

the heading

True or false: Accounting professionals enjoy a wide variety of career opportunities

true