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ACC 2100
Chapter 1
| Question | Answer |
|---|---|
| Purchasing resources that a company needs in order to operate is called | investing activity |
| The income statement does not report cash received from the sale of stock because it is not considered revenue (T/F) | T |
| Which financial statement provides information for a specific point in time? | Balance Sheet |
| Which financial statement summarizes the financial position of a company? | Balance Sheet |
| The ________ in an annual report give a fair depiction of a company’s financial position and operating results. | Auditors Report |
| Q 1.24: The notes to the financial statement are _____ brief and few in number. | seldom |
| Q 1.21: In an annual report, which of the following contains explanations of uncertainties and contingencies regarding the company’s financial statements? | notes to the financial statements |
| When a manufacturer uses its resources to produce goods to sell to other companies, it is engaging in | operating |
| Q 1.82: When a company buys stock in another company, it is called a financing activity. (T/F) | F |
| Investing involves | purchasing the resources the company needs in order to operate |
| Order of Financial Statements? | Income Statement, Ret. Earnings Statement, Balance Sheet |
| Financing Activities | "get capitol' get a loan, increase liabilities. Get Equity by issuing stock. Borrow form creditors. |
| Investing Activities | buying and selling ASSETS. ex. land, building, equipment |
| Operating Activities | day to day operations. Generate REVENUES (from sales or service). Subtract EXPENSES "cost of doing business" |
| Income Statement | Revenue-expenses=net income/loss. Reports the success or failure of a business for a period of time (month, qtr, year) |
| Retained Earnings Statment | Beginning Balance in Ret. Earnings at Jan 1st + Net income - dividends = Ending Balance in Retained Earning at Dec. 31st (covers a time period) |
| Balance Sheet | Shows only a point in time. Assets=Liabilities + Stockholders Equity. "The basic accounting equation" |
| Statement of Cash Flows | financial info and cash receipts from operating, investing, and financing activities |
| What affects stockholder equity? | R.E.D. Revenue, expenses, dividends. |
| Stockholders’ equity represents | claims of owners |
| Annual Report (4 parts) | required by SEC for publicly held cooperations. Must have four financial statements, managements discussion and analysis, notes to financial statements, and auditors report |
| Management Discussion and Anaysis | 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 |
| Notes to Financial tatmnts | discolse details of accounts and methods used. |
| Auditors Report | must be done by outside CPA, an unqualified opinion is a favorable result |
Created by:
mghamiter
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