Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/50

Click to flip

50 Cards in this Set

  • Front
  • Back
Which statement presents information as of a specific point in time?
Balance sheet
Corporations generally receive more favorable tax treatment than sole proprietorships and corporations.
False
Which is not one of the three forms of business organization?
Creditorship
Which is an advantage of corporations relative to partnerships and sole proprietorships?
Reduced legal liability for investors
Easy transfer of ownership is a characteristic of which form of business organization?
Corporation
In which forms of business organization are the owners personally liable for all the debts of the business?
Sole proprietorships and partnerships
The sole proprietorship form of business organization
enerally receives favorable tax treatment relative to a corporation.
Which forms of business organization are considered to be separate accounting entities?
Sole proprietorships, corporations, and partnerships
Internal users of accounting information include a company's stockholders.
False
To which of the following questions will internal users want answers?
What selling price for our product will maximize the company’s net income?

Which product line is most profitable?

Is cash sufficient to pay dividends to stockholders?

All of the answer choices are correct.
Which of the following is not an external user of accounting data?
Chief Financial Officer
which statement about users of accounting information is incorrect?
Regulatory authorities are considered internal users.
Which of the following did not result from the Sarbanes-Oxley Act?
op management must now certify the accuracy of financial information.
Which of the following is the most appropriate definition of accounting information?
The information system that identifies, records, and communicates the economic events of an organization to interested users
Which of the following is required as a result of SOX?
Top management must certify the financial statements for their company.
interest expense is classified under operating activities on the statement of cash flows.
True
Paying interest expense and receiving interest revenue are examples of
Operating activities.
The payment of dividends is an example of a(n)
Financing activity
Which of the following is not one of the three primary business activities?
Advertisin
Which of the following is an example of a financing activity?
Issuing shares of common stock
Resources owned by a business are referred to as
assets.
In terms of the principal types of business activities, paying salaries expense is an example of
operating activities
What kind of classification is cost of goods sold?
Expense
Which of the following would not appear on the income statement?
Dividends paid
Which of the following would not appear on the retained earnings statement?
Service revenue
Net income will result during a time period when
revenues exceed expenses.
The financial statements for Harold Corporation contained the following information:

Accounts receivable $ 5,000
Sales revenue 75,000
Cash 15,000
Salaries and wages expense 20,000
Rent expense 10,000

How much was Harold’s net income?
45,000

Recall the items that are reported on the income statement to derive net income.
The balance sheet reports assets and claims to those assets at a specific point in time.
True
The statement of cash flows reports net income, investing, and financing activities.
false
In which of the following sequences are the financial statements usually prepared?
Income statement, retained earnings statement, balance sheet, and statement of cash flows
Saira's Maid Service began the year with total assets of $120,000 and stockholders' equity of $40,000. During the year the company earned $90,000 in net income and paid $20,000 in dividends. Total assets at the end of the year were $215,000. How much was stockholders' equity at the end of the year?
110,000
To determine ending stockholders’ equity, start with beginning balance then, calculate the change to stockholders’ equity during the year and add or subtract the net change to the beginning balance.
How is the issuance of common stock reported on the statement of cash flows?
Financing activity
What section of a cash flow statement shows the cash spent on new equipment during the past accounting period?
The investing section
Which financial statement reports assets, liabilities, and stockholders’ equity?
Balance sheet
The ending retained earnings balance appears on
Both the retained earnings statement and the balance sheet.
Saira's Maid Service began the year with total assets of $120,000 and stockholders' equity of $40,000. During the year the company earned $90,000 in net income and paid $20,000 in dividends. Total assets at the end of the year were $215,000. How much are total liabilities at the end of the year?
to answer this question, recall the accounting equation, Assets = Liabilities + Stockholders’ equity.

105,000
The balance sheet
reports the assets, liabilities, and stockholders’ equity at a specific date.
If total liabilities decreased by $15,000 and stockholders’ equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?
orrect! The accounting equation: Assets = Liabilities + Stockholders’ Equity, can be used to determine the answer. Therefore, change in assets = ($15,000) + $5,000 = ($10,000)
10,000 decrease
10,000 decrease
claims of owners.
As of December 31, 2014, Stoneland Corporation has assets of $3,500 and stockholders’ equity of $2,000. How much are the liabilities for Stoneland Corporation as of December 31, 2014?
$1,500
Use the accounting equation to answer this question.
he accounting equation: Assets = Liabilities + Stockholders’ Equity, can be used to determine the answer.
The notes to the financial statements are not required if a company presents all 4 financial statements.
False
Only Certified Public Accountants may perform audits.
True
The segment of a corporation’s annual report that describes the corporation’s accounting methods is the
notes to the financial statements.
The segment of the annual report that presents an opinion regarding the fairness of the presentation of the financial position and results of operations is/are the
auditor’s opinion.
When the auditor is satisfied that the financial statements provide a fair representation of the company’s financial position and results of operation in accordance with generally accepted accounting principles, the auditor will express
unqualified opinion.
An annual report includes all of the following except
a listing of all of the stockholders.
Which section of the annual report presents highlights of favorable or unfavorable trends and identifies significant events and uncertainties affecting a company’s ability to pay near-term obligations, and a company’s ability to fund operations and expansion?
Management discussion and analysis
Which of the following are not considered to be primary users of financial statements in countries outside the U.S.?
Economic advisors
The most common description of IFRS as contrasted to GAAP is that
GAAP is rules based and IFRS is principles based.
IFRS stand for:
International Financial Reporting Standards.