Chap 1

Question 1

) responsible for the majority of the US GAAP

Answer 1

Financial Accounting Standards Board (FASB)

Question 2

Identify preferred accounting practices

Answer 2

International Financial Reporting Standards (IFRS)

Question 3

Issues International Financial Reporting Standards (IFRS

Answer 3

International Accounting Standards Board (IASB)

Question 4

Revenue is recognized when the services are performed or the goods are provided to
the buyer.

Answer 4

to the revenue recognition principle

Question 5

Revenue is recognized at the amount expected to be received from the customer. The
amount received is usually in cash, but it is also common to receive a customer’s
promise to pay at a future date, called credit sales.

Answer 5

e revenue recognition principle:

Question 6

states that the company
records expenses incurred to generate the revenue reported. The principles of matching and
revenue recognition are key to modern accountin

Answer 6

Expense recognition principle, also called the matching principle

Question 7

The resources owned by a business are its

Answer 7

assets.

Question 8

The rights of creditors are the debts of the business and are called

Answer 8

d liabilitie

Question 9

The rights of owners are called

Answer 9

equity

Question 10

Since stockholders own a corporation, equity is called

Answer 10

stockholders’ equity

Question 11

describes a company’s revenues and expenses and computes net
income (profit) or loss over a period of time.

Answer 11

Income statemen

Question 12

reports how retained earnings changes from net
income (or loss) and from any dividends over a period of time

Answer 12

. Statement of retained earning

Question 13

describes a company’s financial position (types and amounts of assets,
liabilities, and equity) at a point in time

Answer 13

. Balance sheet

Question 14

identifies cash inflows (receipts) and cash outflows
(payments) over a period of time.

Answer 14

tatement of cash flows —