Financial Accounting ch 1

Which of the following aspects related to the information provided in an income statement?

Ability to earn a profit from it operations during Current period

Which of these would be found on a company's balance sheet?

Accounts receivable, equipment, and notes payable

The impact of financial accounting information on investors and creditors decision is closely related to the concept of _______

Materiality

Shareholders equity arises primarily from amounts invested by shareholders and amounts _____

earned by the corporation

Which of these would be found on a company's balance sheet?

Accounts receivable, notes payable, and equipment

Why does financial accounting have a positive impact on our society?

It allows investors and creditors to redirect their resources to successful companies and away from and successful companies

Amounts owed by the company are referred to as ____

Liabilities

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

Annual report

Which financial statement shows a company's resources equal claims to those resources?

Balance sheet

Which of the following financial statements shows a firm's financial position on a particular date

Balance sheet

Which of the following are financial statements?

Balance sheet, statement of stockholders equity, income statement

Which of the following appear on the statement of stockholders equity?

Beginning balance of retained earnings, dividends, and net income

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

Communicate information to investors and creditors, measure business activities

Predictive value

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

Shareholders' equity arises primarily from amounts invested by shareholders and amounts _____

Earned by corporation

Two sources of stockholders equity or amounts

Earned by corporation, paid in from shareholders

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

Ethics

The private sector organization that is currently responsible for setting accounting standards in the US is the ______

FASB

_______ is the common abbreviation for the board that currently establishes financial accounting and reporting standards in the US

FASB

To be useful for decision-making, information should possess the fundamental qualities of relevance and ________ representation

Faithful

Financial accounting and reporting standards in the United States are established primarily on the _____

Financial accounting standards board (FASB)

Companies communicate information about their business activities primarily through

Financial statements

Based on the introductory section of this chapter, which of course is most like financial accounting?

Foreign language

Faithful representation requires that information is complete, neutral, and ______

Free from material error

Which of the following are attributes of FASB?

Full-time board members, private sector organization, independence

The body of rules and procedures that guide the measurement in communication of financial accounting information is known as______

Generally excepted accounting principles (GAAP)

What is a benefit to a career in accounting?

High salary, wide range of job opportunities, high demand for accounting graduates

Information that Best explains companies' stock price performance is reported on the ________

Income statement

Which financial statement conveys a company's ability to generate profits in the current period?

Income statement

Which financial statement reports revenues and expenses?

Income statement

When a company earns net income, It's retained earnings:

Increase

Financial accounting service which primary function(s)?

Measures business activities, communicates business activities to interested parties

The company reports the following in its income statement: total revenues of $500,000 in total expenses of $300,000. Which of the following is true?

Net income equals $200,000

The characteristics that a new accounting standards should not favor one group of companies over another's or achieve a particular social outcome is an example of ____________

Neutrality

Which qualitative characteristic requires that financial information should not influence decision making to achieve a predetermined result?

Neutrality

Two other types of information in addition to the financial statements that must be reported on the annual reports include _______

Notes disclosures, management discussion and analysis

The three most common forms of business organization or sole proprietorship, ______, and ______

Partnership, corporation

Confirmatory value

Positive income is consistent with effectiveness of management

And advantage of the corporate form of organization is that a corporation _______

Provides limited liability to stockholders

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

Relevance

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

What are the two fundamental qualitative characteristics identified by the financial accounting standards board (FASB) conceptual framework?

Relevance in faithful representation

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

Retained earnings

Sales of products or services are referred to as ____

Revenues

Based on the introductory section of the chapter financial accounting can also be described as a way to _____

Tell the financial story of a company

A company reports the following in its balance sheet: total assets of $100,000 in total liabilities of $700,000. Which of the following is true?

Total stockholders equity equals $100,000

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

True

Resources of a company are referred to as ____

assets