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Financial Accounting

Exam 1

QuestionAnswer
primary objective of the balance sheet Report the financial position of the reporting entity at a particular point in time.
Which of the following would not be found on the statement of cash flows? Cost flow from manufacturing activities
Which of the following has primary responsibility to develop Generally Accepted Accounting Principles? Financial Accounting Standards Board.
Which of the following has the legal authority to determine financial reporting in the United States? Securities and Exchange Commission.
Which of the following transactions increases both cash and net income? Cash receipts from customers for services provided.
A calendar year reporting company preparing its annual financial statements should use the phrase "At December 31, 2020" in the heading of which financial statements? On the balance sheet only
Which of the following properly describes the impact on the financial statements when a company borrows $22,000 from a local bank? Liabilities increase $22,000.
Which of the following statements is correct? Cash received from issuing common stock to stockholders is reported as a financing activity cash flow within the statement of cash flows.
Which of the following statements is correct? Revenues are reported on the income statement regardless of whether the customer has paid for the goods or services.
Which of the following groups has primary responsibility for the information contained in the financial statements? The Company's management.
Why is the CPA's role in performing audits important to our economic system? The audit of financial statements helps investors and others to know that they can rely on the information presented in the financial statements.
Which of the following assumptions implies that a business can continue to remain in operation into the foreseeable future? Going Concern or Continuity assumption.
Which of the following assumptions implies that the assets and liabilities of the business are accounted for separately from the assets and liabilities of the owners? Separate entity assumption.
Which of the following best describes liabilities? Probable debts or obligations of an entity as a result of past transactions, which will be paid with assets or services.
Which of the following fundamentals requires Jones to record the truck at the price paid to buy it? Historical cost principle.
Which of the following describes the primary objective of financial accounting? To provide useful financial information about a business to help external parties make informed decisions.
Which of the following would not be considered a current asset? Land used in daily operations.
Which of the following statements is true? Current liabilities are debts expected to be paid within the next year.
Which of the following would not be included under the account category of expenses within the chart of accounts? Prepaid insurance expense.
Which of the following liability accounts does not usually require a future cash payment? Unearned revenues.
A corporation purchased factory equipment using cash. Which of the following statements regarding this purchase is correct? The total assets will not change.
Alpha Company issued 6,000 shares of $10 par value common stock to stockholders, in exchange for $90,000 cash. Which of the following correctly describes the impact of this transaction on Alpha's financial statements? Additional paid-in capital of $30,000 is reported in stockholders' equity.
Assets have a ____ balance and increased with ______ debit and debit
Income statements are... Temporary accounts and do not retain their balances from one period to the next.
Which of the following correctly describes the closing entry process? The closing process creates a zero balance in all temporary accounts at the end of each period.
A company's ________ will report total revenues and the total expenses required to generate that revenue for the Company's accounting period. Income Statement
Which of the following account balances would not be included in the calculation of the current ratio? Equipment
Due to the relationships among financial statements, the statement of stockholders' equity links the income statement to the balance sheet. False
What financial statement would you look at to determine the dividends declared by a business? Statement of stockholders' equity.
Which financial statement would you use to determine a company's earnings performance during an accounting period? Income statement.
Calculate Income before Income Taxes total revenues - total expenses = net income
Calculate net income pretax income - income tax expense = net income
Created by: awb1029
 

 



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