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ACCT 2331 > EXAM 1 > Flashcards

EXAM 1 Flashcards

1
Q

PRIMARY MEANS OF COMMUNICATING BUSINESS ACTIVITIES

A

FINANCIAL STATEMENT

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2
Q

REPORTS PROVIDING INFO TO EXTERNAL USERS

A

FINANCIAL STATEMENTS

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3
Q

4 PRIMARY FINANCIAL STATEMENTS

A
  1. INCOME STATEMENT
  2. STATEMENT OF STOCKHOLDER’S EQUITY
  3. BALANCE SHEET
  4. STATEMENT OF CASH FLOWS
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4
Q

REPORTS REVENUES, EXPENSES, & NET INCOME/LOSS

A

INCOME STATEMENT

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5
Q

INCOME STATEMENTS REPORT WHAT?

A

REVENUES, EXPENSES, NET INCOME/LOSS

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6
Q

SUMMARIZES CHANGES IN STOCKHOLDER’S EQUITY

A

STATEMENT OF STOCKHOLDER’S EQUITY

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7
Q

STATEMENT OF STOCKHOLDER’S EQUITY SUMMARIZES WHAT?

A

CHANGES IN STOCKHOLDER’S EQUITY

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8
Q

2 PRIMARY COMPONENTS OF STOCKHOLDER’S EQUITY

A
  1. COMMON STOCK

2. RETAINED EARNINGS

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9
Q

COMMON STOCK REPRESENTS WHAT?

A

AMOUNTS INVESTED BY STOCKHOLDERS

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10
Q

AMOUNTS INVESTED BY STOCKHOLDERS ARE CALLED WHAT?

A

COMMON STOCKS

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11
Q

COMMON STOCK IS AN EXTERNAL OR INTERNAL SOURCE OF STOCKHOLDER’S EQUITY?

A

EXTERNAL

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12
Q

RETAINED EARNINGS ARE AN EXTERNAL OR INTERNAL SOURCE OF STOCKHOLDER’S EQUITY?

A

INTERNAL

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13
Q

RETAINED EARNINGS = ?

A

ALL NET INCOME - ALL DIVIDENDS

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14
Q

RETAINED EARNINGS = ? - ALL DIVIDENDS

A

ALL NET INCOME

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15
Q

RETAINED EARNINGS = ALL NET INCOME ? ALL DIVIDENDS

A

-

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16
Q

RETAINED EARNINGS = ALL NET INCOME - ?

A

ALL DIVIDENDS

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17
Q

PRESENTS COMPANY’S FINANCIAL POSITION

A

BALANCE SHEET

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18
Q

BALANCE SHEET PRESENT WHAT?

A

COMPANY’S FINANCIAL POSITION

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19
Q

ACCOUNTING EQUATION:

ASSETS = ?

A

LIABILITIES + STOCKHOLDER’S EQUITY

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20
Q

ACCOUNTING EQUATION:

ASSETS = ? + STOCKHOLDER’S EQUITY

A

LIABILITIES

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21
Q

ACCOUNTING EQUATION:

ASSETS = LIABILITIES ? STOCKHOLDER’S EQUITY

A

+

22
Q

ACCOUNTING EQUATION:

ASSETS = LIABILITIES + ?

A

STOCKHOLDER’S EQUITY

23
Q

STOCKHOLDER’S EQUITY = ?

A

TOTAL ASSETS - TOTAL LIABILITIES

24
Q

STOCKHOLDER’S EQUITY = ? - TOTAL LIABILITIES

A

TOTAL ASSETS

25
Q

STOCKHOLDER’S EQUITY = TOTAL ASSETS ? TOTAL LIABILITIES

A

-

26
Q

STOCKHOLDER’S EQUITY = TOTAL ASSETS - ?

A

TOTAL LIABILITIES

27
Q

MEASURES ACTIVITIES INVOLVING CASH RECEIPTS & PAYMENTS

A

STATEMENT OF CASH FLOWS

28
Q

STATEMENT OF CASH FLOWS MEASURES WHAT?

A

ACTIVITIES INVOLVING CASH RECEIPTS & PAYMENTS

29
Q

3 CATEGORIES OF CASH TRANSACTIONS

A
  1. OPERATING
  2. INVESTING
  3. FINANCING
30
Q

2 OTHER COMPONENTS OF ANNUAL REPORTS

A
  1. MANAGEMENT’S DISCUSSION & ANALYSIS

2. NOTE DISCLOSURES

31
Q

Ability to earn a profit from its operations during the current period IS DETERMINED WHERE?

A

income statement

32
Q

Shareholders’ equity arises primarily from amounts invested by shareholders and amounts ______.

A

earned by the corporation

33
Q

Retained earnings represents ___?

A

the total net income earned over the life of the company that has not been distributed as dividends

34
Q

the total net income earned over the life of the company that has not been distributed as dividends ARE?

A

RETAINED EARNINGS

35
Q

Profits earned by a company that have not been paid to stockholders are called
___
earnings

A

RETAINED EARNINGS

36
Q

The purpose of an income statement is to:

A

summarize the profit-generating activities that occurred during a particular reporting period

37
Q

Which ITEMS would be found on a company’s balance sheet?

A
  1. ACCOUNTS RECEIVABLE
  2. EQUIPMENT
  3. NOTES PAYABLE
  4. COMMON STOCK
38
Q

A balance sheet lists theSE 3 ITEMS as of a specific date.

A
  1. Assets
  2. LIABILITIES
  3. Stockholders’ equity
39
Q

The purpose of a statement of cash flows is to provide information about WHAT 2 ACTIVITIES?

A
  1. CASH RECEIPTS

2. CASH DISBURSEMENTS

40
Q

CASH RECEIPTS & DISBURSEMENTS ARE LISTED WHERE?

A

STATEMENT OF CASH FLOWS

41
Q

The financial statement that is most useful in explaining a company’s stock price performance is the ___?

A

INCOME STATEMENT

42
Q

Information that best explains companies’ stock price performance is reported on the ___?

A

INCOME STATEMENT

43
Q

___ is the common abbreviation for the Board that currently establishes financial accounting and reporting standards in the U.S. (Enter the acronym.)

A

FASB (Financial Accounting Standards Board)

44
Q

To be useful for decision making, information should possess theSE 2 fundamental qualities of
representation.

A
  1. relevance

2. FAITHFUL REPRESENTATION

45
Q

Predictive value and confirmatory value are components of which fundamental qualitative characteristic?

A

RELEVANCE

46
Q

Financial information that may impact investors’ and creditors’ decisions is referred to as ___ and must be reported under GAAP

A

MATERIALITY

47
Q

Positive income is consistent with effectiveness of management

A

Confirmatory value

48
Q

Consistently increasing income helps forecast the company’s ability to generate future cash

A

Predictive value

49
Q

CRADLER MNEMONIC

A

CONSERVATIVE REPUBLICANS AND DEMOCRAT LIBERALS EXPENSE RETARDEDLY

50
Q

CradleR STANDS FOR?

A
  1. CONTRIBUTED CAPITAL

2. RETAINED EARNINGS

ACCT 2331 (3 decks)

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