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Financial Accounting (Exam One) > Chapter One Questions > Flashcards

Chapter One Questions Flashcards

1
Q

Why is Accounting important?

A

Accounting information impacts us all

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2
Q

Preparing and entering a list of checks issued…

A

Recording

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3
Q

Using a cash register to enter sales…

A

Recording

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4
Q

Entering a list of the sales invoices, including the prices and quantities, for the company’s record keeper….

A

Identifying

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5
Q

Interpreting information from financial reports.

A

communicating

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6
Q

Preparing financial statements for creditors.

A

communicating

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7
Q

The recording of transactions and events only, either manually or electronically…

A

Recording-keeping

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8
Q

An information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization’s business activities.

A

Accounting

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9
Q

Customers

A

External Information User

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10
Q

Purchasing manager

A

Internal Information User

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11
Q

Marketing Manager

A

Internal Information User

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12
Q

Suppliers

A

External Information User

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13
Q

Labor Union

A

External Information User

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14
Q

_________ includes opportunities in general accounting, cost accounting and internal auditing.

A

Managerial accounting

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15
Q

The majority of accounting opportunities are in _____ accounting.

A

private

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16
Q

Accounting certifications include: IFRS, CPA , GAAP
SEC

A

CPA

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17
Q

In the fraud triangle, when a person feels an incentive to commit fraud, this is referred to as _______.

A

pressure

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18
Q

A company records the expenses incurred to generate the revenue reported…

A

Expense recognition principle

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19
Q

Revenue is recognized when goods are provided to the customer at the amount expected to be received…

A

Revenue recognition principle

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20
Q

A company reports the details behind financial statements that would impact user’s decisions…

A

Full-disclosure principle

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21
Q

Accounting information is based on actual cost…

A

Measurement principle

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22
Q

Presumes that the business will continue operating in the future…

A

Going-concern assumption

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23
Q

A business is accounted for separately from other business entities and its owner…

A

Business entity assumption

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24
Q

The life of the company can be divided into specific time periods…

A

Time period assumption

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25
Q

The four basic financial statements are:

A

Income Statement, Statement of retained earnings, Balance sheet, and Statement of cash flows

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26
Q

Identify which items belong on the income statement…

A

Revenue, expenses and net income

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27
Q

Identify which items belong on the statement of retained earnings.

A

Dividends, beginning retained earnings, ending retained earnings.

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28
Q

Identify which items belong on the balance sheet.

A

Cash, accounts receivable, and common stock

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29
Q

Identify which items belong on the statement of cash flows

A

Cash flows from investing, operating and financing activities

30
Q

Analyzing and interpreting reports.

A

Communicating

31
Q

Acquiring knowledge of revenue transactions.

A

Identifying

32
Q

Reporting debt owed to lenders.

A

Communicating

33
Q

Maintaining a log of sales transactions.

A

Recording

34
Q

Measuring revenue from a holiday sale.

A

Recording

35
Q

Measuring the costs of a product.

A

Recording

36
Q

Reporting the profitability of a product line.

A

Communicating

37
Q

Preparing financial statements.

A

Communicating

38
Q

Should we buy, hold, or sell a company’s stock?

A

External user

39
Q

What are the costs of our service to customers?

A

Internal user

40
Q

What are the costs of our service to customers?

A

Internal user

41
Q

Will we earn enough revenue from developing this new product?

A

Internal user

42
Q

Should we make a five-year loan to that business?

A

External user

43
Q

How well has our new salesperson performed?

A

Internal user

44
Q

Should we spend additional money for redesign of our product?

A

Internal user

45
Q

Business press

A

Internal User

46
Q

Politician

A

External User

47
Q

SEC regulator

A

External User

47
Q

Creditor

A

External User

48
Q

External auditors

A

External Users

49
Q

Labor boss

A

External User

50
Q

Customer

A

External User

51
Q

Planning transactions to minimize taxes

A

Tax accounting

52
Q

Analyzing external financial reports

A

Financial accounting

53
Q

Internal auditing

A

Managerial accounting

54
Q

Managerial accounting

A

Managerial accounting

55
Q

Cost accounting

A

Managerial accounting

56
Q

Reviewing financial statements for criminal investigations

A

Financial accounting

57
Q

External auditing

A

Financial accounting

58
Q

Budgeting

A

Managerial accounting

59
Q

A more effective way to stop fraud than detection.

A

Prevention

60
Q

Beliefs that distinguish right from wrong

A

Ethics

61
Q

Procedures to reduce fraud—examples are independent reviews, physical controls, and good records.

A

Internal controls

62
Q

Examines whether financial statements are prepared using GAAP.

A

Audit

63
Q

Three factors push a person to commit fraud: opportunity, pressure, and rationalization.

A

Fraud triangle

64
Q

AJ Company pays a business income tax and has two owners.

A

Corporation

65
Q

Ownership of Zander Company is divided into 1,000 shares of stock. The company pays a business income tax.

A

Corporation

66
Q

Russell is the sole owner of Wilson Sports. The business is not a separate legal entity from Russell and the business ends with his death.

A

Sole proprietorship

67
Q

Trent Company is owned by Trent Malone, who is personally liable for the company’s debts.

A

Sole proprietorship

68
Q

Micah and Nancy own Financial Services, which pays a business income tax. Micah and Nancy do not have personal responsibility for the debts of Financial Services

A

Corporation

69
Q

Vera is the sole owner of Tech Solutions. The business is a separate legal entity and does not pay an additional business income tax.

A

Limited liability company

70
Q

IBC Services does not have separate legal existence apart from the one person who owns it.

A

Sole proprietorship

71
Q

Harvey and Louis own NYC Law. Harvey and Louis are jointly liable for partnership debts.

A

Partnership

Financial Accounting (Exam One) (6 decks)

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