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Accounting
| Question | Answer |
|---|---|
| T or F. Accounting provides the principal medium for communicating financial info of a business to all interested parties | True |
| T or F. Identifying is the process of keeping a chronological diary of events measured in dollars and cents | False. Identifying is selecting those events that are considered evidence of economic activity relevant to a particular business organization. What was described is is called recording. |
| Customers and regulatory agencies are external users of accounting data. | True |
| Internal users of accounting information are managers, production supervisors, and finance directors. | True |
| The FASB has been granted the power from the SEC to establish GAAP | True |
| GAAP is an acronym for "Generally accepted accounting principals" | True |
| Under the economic entity assumption, it is assumed that the company is separate and distinct from its owner(s) | True |
| The monetary unit assumption requires that all dollar amounts be rounded to the nearest dollar. | False. The monetary unit assumption requires that only transaction data capable of being expressed in terms of money be included in the accounting records of the economic entity. |
| At the time as asset is acquired, cost and value should be the same. | True |
| Proprietors are liable only for the amount the have invested in the business. | False. A proprietor has unlimited liability for the debts incurred by the business. The stockholders of a company have limited liability. |
| An asset may be intangible and represent nonphysical rights. | True |
| Stockholders' equity is the stockholders' claim on total assets. | true |
| Expenses are the decreases in stockholders' equity that result from operating the business. | True |
| If a liability increases, there would either have to be an equal decrease in another liability, a decrease in an asset, or an increase in stockholders' equity for the basic accounting equation to remain equal. | False. If a liability increases, there would have to be an equal decrease in another liability, an increase in an asset, or a decrease in stockholders' equity for the basic accounting equation to remain equal. |
| The basic accounting equation is in balance when the creditor and ownership claims against the business equal the total assets. | True |
| External transactions involve economic events between the company and some other enterprise or party. | True |
| In the retained earnings statement, revenues are listed first, followed by expenses, and net income/loss. | False. It is the income statements which has revenues listed first, followed by expenses, and then net income/loss. |
| The balance sheet is often referred to as the operating statements. | False. The income statement is often reffered to as the operating statement. |
| Management consulting includes examining the financial statements of companies and expressing an opinion as to the fairness of their presentation. | False. Managing consulting provides advice to managers of companies concerning various aspects of a company's operations. The one described is is the field of auditing. |
| Which of the following is not part of the accounting process? Recording, identifying, financial decision making, or communicating. | |
| Internal users of accounting data include: | |
| The organization that has primary responsibility for creating international accounting standards is | |
| The monetary unit assumption: | |
| A proprietorship is a business: | |
| A net loss qill result during a time period when: | |
| A company might carry on many activities that do not represent business transactions such as: | |
| An example of an internal transaction is the: | |
| The Relias Uptown Grill receives a bill of $400 from an advertising agency. The owner, John Relias, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is: | |
| James, the inventory clerk, indicates that $975 of supplies were used during the period. The effect on specific items in the basic accounting equation is: | |
| A company pays a dividend of $500 in cash. The effect on the specific items in the basic accounting equation is: | |
| Company A purchases $600 of equipment from another company B for cash. the effects on the component of the basic accounting equation of Company A is: | |
| Comp. A at Sept 17: As. 13,000; liab. 8000; equity 5000; on sept 18, company A receives 500 of cash revenue and earns 200 on credit. An employee works 8 hrs and receives 10 per hr. He will not get paid until sept 21. At the end of sept 18 totals are: | |
| As of Dec 31, 2013, Company A has liab. 5000 and equity of 7000. It received revenues of 23000 during the year ended dec. 31, 2013. What are the assets for Company A as of that date? | |
| The statements that report revenues and expenses is the | |
| Company A buys a 12000 van on credit. This transaction will affect the: | |
| The financial statement that summarizes the financial position of a company is the: | |
| Which of the following would not appear on a balance sheet? Accounts receivable, retained earnings, utilities expense, or wages payable? | |
| Auditing is: | |
| The private accountant might be involved in: |
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pmp116
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