Chp 3 Terms Flashcards

1
Q

Economic events that require recording in the financial statements

A

Accounting Transactions

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2
Q

Stockholders’ equity is comprised of two parts:

A

Common stock, retained earnings

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3
Q

T/F: revenue produced by colorations is much greater than that produced by proprietorships and partnerships.

A

True

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4
Q
An external user of accounting info is which of the following?
A. Marketing manager of company?
B. President of labor union
C. Officer of corporation
D. Production supervisor of the business
A

B.

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5
Q

Purchasing a delivery truck is what type of activity?

A

Investing

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6
Q

A business earning revenues is considered to be a:

A

Operating activity

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7
Q

Borrowing money from a bank is considered to be what type of activity?

A

Financing

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8
Q

Which of the following are found in an income statement?

  • revenues
  • cash
  • dividends
  • expenses
A

Revenues and expenses

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9
Q

Which of the following accounts will be found on a balance sheet?

  • cash
  • accounts receivable
  • accounts payable
  • inventory
  • cogs
  • common stock
  • notes payable
A

Accounts payable, cash, inventory

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10
Q

If revenues are 20,000 and expenses are 5,000 then the business earn/lost:

A

Earned $15,000

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11
Q

If revenues are 18,000 and expenses are 22,000 then the business earned or lost

A

Incurred a net loss of 4,000

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12
Q

If the beginning retained earnings is 10,000, net loss is 3,000 and dividends are 1,000, then the ending retained earnings shown on the statement of retained earnings is :

A

$6,000

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13
Q

System of collecting and processing transaction data, and communicating them to decision makers is:

A

Accounting information system

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14
Q

Which is an appropriate date for a balance sheet?

  • dec 31, 2015
  • for the month ending in dec 31, 2015
  • for the quarter ending in December 31, 2015
A

Dec 31, 2015

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15
Q

The statement which shows the operating, investing, and financing activities of a business is the:

A

Statement of cash flows

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16
Q

Provides additional details about the items presented in the main body of the financial statements ____________

A

Notes to the financial statements

17
Q

A_________ is a separate legal entity owned by stockholders

A

Corporation

18
Q

The _____________ statement includes an addition of net income and a deduction of dividends

A

Restrained earnings

19
Q

The ability of a company to pay interests as it comes due and to repay the face value of debt at maturity:

A

Solvency

20
Q

The constraint of determining whether an item

Is important enough to influence the decision of a reasonably prudent investor or creditor:

A

Materiality.