Chapter 1 Flashcards
How would net income most likely affect the accounting equation
A: Increase assets and increase liabilities
B: Decrease assets and decrease liabilities
C: Increase liability and decrease shareholders equity
D: Increase assets and increase shareholders equity
Answer D
Which items are reported on the balance sheet? A: Inventory B: Accounts payable C: Retained earnings D: All of the above
D
the two types of accounting are A: Profit and non Profit B: Financial and managerial C: Internal and exeternal D: Bookkeeping and budgeting
B
Financial statements under IFRS are not used to
A: By investors to make investment decisions
B: by stakeholders to asses accountability and management
C: By tax authorities to decide on the amount of tax that need to be paid
D: By suppliers to decide on the credit granting decisions
C
Remember !
Net income =
Changes in retained earnings=
Net income = Revenues - Ecpenses
Changes in retained earnings = net income - cash dividends !
The accounting assumption that stated that the business rather than it s owners is the reporting unit is the A: separate entity assumption B: Going concern assumption C: stable monetary unit assumption D: Historical cost assumption
A
Expenses are
A:Increases in liabilities resulting from purchasing assets
B: Increases in assets resulting from operations
C: Imcreases in retained earnings resulting from operations
D: Decreases in r.e resulting from operations
Answer: D
An investor who wants to assess a company’s overall financial position at the end of the period would probably examine the
A: Balance sheet
B: Statement of changes in equity
C: Statment if cash flows and income statement
D: Income statement only
Answer is A
Consider the following transactions I Borrowed cash on note payable II provided services on account 10.000 III received cash from a customer as a payment on account 8000 IIII received a utility bill 1200
A: 90.000
Issued shares of 80.000, purchased Building for 40.000, purchased inventory for 20.000, performed services for clients for 10.000 cash and recognized a depreciation expense of 2000
What is the shareholders equity
88000
the owners interests in the assets are known as A: Liabilities B: Long Termin assets C: operating expenses D: Equity
D
Which financial statement provided an overview of the financial position of a company at a specific point in time
A: Both balance sheet and IS
B: The ic only
C the statement of cash flows
D the balance sheet only in
D
How would net income most likely affect the accounting equation?
A: Increase assets and increase shareholders equity
B: increase liabilities and decrease equity
C: decrease assets and increase liabilities
D: increase assets and decrease liabilities
A
The list of all accounts with their balance is the A: Balance sheet B: Chart of accounts C: Trial Balance D: Journal
C
