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ACCT303 > CH 1: connect > Flashcards

CH 1: connect Flashcards

1
Q

A system that collects and processes financial information about an organization and reports that information to decision makers.

A

Accounting

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2
Q

Information that helps evaluate the company’s past behavior and predict its future.

A

relevant information

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3
Q

An unincorporated business owned by two or more persons.

A

partnership

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4
Q

The organization for which financial data are to be collected (separate and distinct from its owners).

A

Accounting entity

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5
Q

An incorporated entity that issues shares of stock as evidence of ownership

A

Corporation

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6
Q

An examination of the financial reports to ensure that they represent what they claim and conform with generally accepted accounting principles.

A

audit

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7
Q

An unincorporated business owned by one person.

A

sole proprietorship

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8
Q

Certified Public Accountant.

A

CPA

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9
Q

A report that describes the auditor’s opinion of the fairness of the financial statement presentations and the evidence gathered to support that opinion.

A

audit report

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10
Q

Securities and Exchange Commission.

A

SEC

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11
Q

Financial Accounting Standards Board.

A

FASB

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12
Q

Generally accepted accounting principles.

A

GAAP

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13
Q

A company with stock that can be bought and sold by investors on established stock exchanges.

A

publicly traded

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14
Q

accounts receivable

A

asset

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15
Q

cash/cash equivalents

A

assets

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16
Q

net sales

A

revenue

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17
Q

Debt due within one year

A

liability

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18
Q

taxes payable

A

Liability

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19
Q

retained earnings

A

Stockholders’ equity

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20
Q

Cost of products sold

A

expense

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21
Q

Selling, general, and administrative expense

A

expense

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22
Q

Income taxes

A

expense

23
Q

accts payable

A

Liability

24
Q

Trademarks and other intangible assets

A

Asset

25
Q

Property, plant, and equipment

A

Asset

26
Q

land

A

asset

27
Q

Long-term debt

A

liability

28
Q

Inventories

A

asset

29
Q

Interest expense

A

Expense

30
Q

A balance sheet shows

A

assets, liabilities, and stockholders’ equity at a single point in time

31
Q

The two sources of stockholders’ equity are amounts Blank

A

-paid in from shareholders
-earned and retained by the corporation

32
Q

does revenue include payments not actually made yet

A

YES on inc statement

33
Q

The statement of stockholders’ equity reports the

A

changes in earnings and dividends for a specified period of time

34
Q

what is on inc sheet and retained earnings

A
35
Q

Which of the following is a disadvantage of a corporation when compared to a partnership?

A

The corporation and its stockholders are subject to double taxation.

36
Q

Which of the following statements is true about a sole proprietorship?

A

The owner and the business are separate accounting entities but not separate legal entities.

37
Q

Which of the following groups has primary responsibility for the information contained in the financial statements?

A

The company’s management

38
Q

Which of the following is not reported as a liability on a balance sheet?

A

Common stock

39
Q

In what order would the items on the balance sheet appear?

A

Assets, liabilities, common stock, and retained earnings

40
Q

Sources of financing for the company’s economic resources include:

A

Liabilities and stockholders’ equity.

41
Q

Which of the following describes the amount of insurance expense reported on the income statement?

A

The amount of insurance used (incurred) in the current period to help generate revenue.

42
Q

Which financial statement would you use to determine a company’s earnings performance during an accounting period?

A

Income statement

43
Q

Which of the following equations is the balance sheet equation?

A

Assets = Liabilities + Stockholders’ Equity

44
Q

Which of the following statements describes the balance sheet?

A

Assets are generally reported on the balance sheet at the cost incurred to acquire them.

45
Q

bank loans

A

liability

46
Q

Dividends payable

A

Liability

46
Q

Retained earnings

A

shareholders equity

47
Q

Provision for income taxes*

A

expense

48
Q

Machinery and equipment

A

assest

49
Q

Rental and royalty costs

A

expenses

50
Q

Investments (in other companies)

A

Asset

51
Q

Why does a company hire independent auditors?

A

To report on the fairness of financial statement presentation.

52
Q

Which of the following would most likely increase retained earnings?

A

An increase in revenues.

53
Q
A

ACCT303 (17 decks)

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