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ACCT 1100 > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Resources a company owns or controls

A

Assets

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2
Q

An asset that promises a future inflow of resources

A

A receivable

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3
Q

Examples of (blank) are cash, supplies, equipment, land & accounts receivable..

A

Assets

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4
Q

Creditors’ claims on assets

A

Liabilities

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5
Q

A (blank) is a liability that promises a future outflow of resources.

A

payable

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6
Q

The owner’s claim on assets & is equal to assets minus liabilities.

A

Equity

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7
Q

(Blank) is also called net assets or residual (blank).

A

Equity

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8
Q

Accounting equation formula

A

Assets = Liabilities + Equity

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9
Q

Expanded accounting equation

A

Assets = Liabilities + Owner, Capital - Owner, Withdrawals + Revenues - Expenses

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10
Q

The (blank) applies to all transactions & events, to all companies & organizations & to all points in time.

A

Accounting equation

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11
Q

(Blank) are inflows of cash & other net assets from owner contributions, which increase equity.

A

Owner investments

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12
Q

(Blank) are outflows of cash & other assets to owners for personal use, which reduce equity.

A

Owner withdrawals

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13
Q

(Blank) increase equity (via net income) from sales of products & services to customers; ex: sales of products or consulting services provided

A

Revenues

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14
Q

(Blank) decrease equity (via net income) from costs of providing products & services to customers; ex: advertising, utilities & insurance fees.

A

Expenses

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15
Q

(Blank) increases from owner investments & revenues.

A

Equity

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16
Q

Withdrawals & expenses decrease (blank)

A

Equity

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17
Q

Equity consists of 4 parts. What are they?

A

Owner, Capital; Owner, Withdrawals; Revenues; Expenses

18
Q

Shareholders, boards of directors, nonmanagerial employees, regulators & voters are (blank).

A

External users

19
Q

Purchasing managers are (blank).

A

Internal users

20
Q

The fraud triangle shows 3 factors that push a person to commit fraud. What are those factors?

A

Opportunity, pressure or incentive & rationalization

21
Q

What act requires documentation & verification of internal controls & emphasizes effective internal controls?

A

Sarbanes-Oxley Act (SOX)

22
Q

Clawback Mandates recovery (clawback) of excessive pay & Whistleblower SEC pays whistleblowers 10% to 30% of sanctions exceeding $1M are 2 provisions for what act?

A

Dodd-Frank Wall Street Reform & Consumer Protection Act or Dodd-Frank

23
Q

GAAP

A

Generally accepted accounting principles

24
Q

Financial accounting is governed by concepts & rules known as (blank).

A

GAAP

25
Q

FASB

A

Financial accounting standards board

26
Q

Sets GAAP from the SEC

A

FASB

27
Q

US government agency that oversees proper use of GAAP by companies that sell stock & debt to the public

A

Securities & Exchange Commission (SEC)

28
Q

FASB conceptual framework

A

Objectives, qualitative characteristics, elements & recognition & measurement

29
Q

IASB

A

International Accounting Standards Board (IASB)

30
Q

Who issues International Financial Reporting Standards (IFRS) that identify preferred accounting practices?

A

IASB

31
Q

The assumptions, concepts & guidelines for preparing financial statements

A

General principles

32
Q

Detailed rules used in reporting business transactions & events; they’re described as we encounter them

A

Specific principles

33
Q

Accounting principle that accounting information is based on actual cost

A

Measurement principle (cost principle)

34
Q

Accounting principle where revenue is recorded 1. when goods or services are provided to customers & 2. at the amount expected to be received from the customer

A

Revenue recognition principle

35
Q

Accounting principle that a company records the expenses it incurred to generate the revenue reported. Ex: rent for office space

A

Expense recognition principle (matching principle)

36
Q

Accounting principle that a company reports the details behind financial statements that would impact users’ decisions; often in the footnotes of statements

A

Full disclosure principle

37
Q

Accounting assumption that accounting information presumes that the business will continue operating instead of being closed or sold. Ex: property is reported at cost instead of liquidation value

A

Going-concern assumption

38
Q

Accounting assumption that transactions & events are expressed in money units. Ex: US dollar or Mexican peso

A

Monetary unit assumption

39
Q

Accounting assumption that the life of a company can be divided in units of time like months or years & useful reports can be prepared for those units.

A

Time period assumption

40
Q

Accounting assumption that a business is accounted for separately from other business entities & its owner

A

Business entity assumption

ACCT 1100 (2 decks)

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