Chapter 1 Quick Check

Financial Accounting Standards Board (FASB)

Generally Accepted Accounting Principles (GAAP) are currently formulated by the

financial position on a specific date.

The balance sheet reports the

Stockholders not personally liable for entity's debts

Which of the following characteristics best describes a corporation?

Faithful representation concept

Which of the following requires accounting information to be complete, neutral, and free from material error?

Sole Proprietorship

Which type of business organization is owned by only one owner?

Taxing authorities, Customers, and Investors

Who are external users of a business's financial information?

Measures business activities, communicates the results to decision makers, processes information into reports.

Accounting is the information system that

13.1%

Assume Global Cleaning Service had net income of $570 for the year. Global Cleaning Service's beginning and ending total assets were $4,520 and $4,180, respectively. Calculate Global Cleaning Service's return on assets for the year.

Increase both liabilities and equity by $180

Assume that Global Cleaning Service performed cleaning services for a department store on account for $180. How would this transaction affect Global Cleaning Service's accounting equation?

$1,350

At the end of a recent year, Global Cleaning Service, a full-service house and office cleaning service, had total assets of $3,630 and equity of $2,280. How much were Global Cleaning Service's liabilities?

Net Income of $3,900

Consider the overall effects on Global Cleaning Service form selling and performing services on account for $6,400 and paying expenses totaling $2,500. What is Global Cleaning Service's net income or net loss?