Chapter 1

Question 1

Net Worth =

Answer 1

equity

Question 2

businesses need initial financial aid which comes in

Answer 2

loans, investors, creditors

Question 3

stakeholders are

Answer 3

resource providers

Question 4

3 types of resources

Answer 4

physical
financial
labor

Question 5

types of accounting

Answer 5

financial accounting; focused on needs of external users; investors and creditors
managerial accounting; focused on internal users needs; mangers, employees, unions
nonprofit; beneficiaries, legislators

Question 6

FASB

Answer 6

(The Financial Accounting Standards Board)
generally accepted accounting principles

Question 7

Assets=

Answer 7

liabilities + stockholders equity

Question 8

stockholders equity holds

Answer 8

common stock and retained earnings

Question 9

general ledger

Answer 9

complete collection of a company’s accounts

Question 10

revenue is

Answer 10

sales

Question 11

an asset source transaction is

Answer 11

an event that increases total assets and total claims
ex; issuing common stock for cash

Question 12

who has priority in liquidations

Answer 12

creditors and then investors

Question 13

going concern doctrine

Answer 13

assumes that a business is able to continue its operations into the foreseeable future

Question 14

Asset Exchange transation

Answer 14

decrease one asset and increase another

Question 15

asset use transaction

Answer 15

decrease the total assets and the total claims

Question 16

income statement

Answer 16

the financial statement showing benefits and sacrifices during accounting period

Question 17

permanent and

Answer 17

closed accounts

Question 18

balance sheet records

Answer 18

assets liabilities and stockholders equity

Question 19

how they use cash is the

Answer 19

statement of cash

Question 20

stockholders equity may be subdivided into

Answer 20

common stock and retained earnings

Question 21

stakeholders

Answer 21

are the users of accounting information

Question 22

Cash flows

Answer 22

Operating Activities
Financial Activities
Investing Activities

Question 23

Permanent accounts hold

Answer 23

retained earnings

Question 24

accrual accounting

Answer 24

recognizing revenue when it is earned and expenses when they are incurred, regardless of when cash changes hands
when a company records a sale of goods as revenue when the goods are shipped to the customer, even though the customer has not yet paid for the goods

Question 25

defferal

Answer 25

some revenue or expense event that recognized after cash has been exchanged, prepaid asset

Question 26

financial accounting

Answer 26

focuses on the external needs of users

Question 27

managerial accounting

Answer 27

focuses on the internal needs of users

Question 28

reporting entities

Answer 28

any business entity that is engaging in Financial Reporting according to some Financial Reporting Standards

Question 29

the permanent accounts include

Answer 29

assets, stockholders equity, and liabilities