Week 1 - Graded Quiz Flashcards
Strategic Investment Group is looking to invest $100,000 into a company. Where should Strategic Investment Group look for relevant information about the company’s performance?
The company’s Financial Books. Companies prepare Financial Books to communicate their economic performance and financial position to external audiences including investors and creditors.
College Computers, based in the U.S., is preparing its financial books. Which of the following should direct the preparation of College Computer’s financial books?
U.S. Generally Accepted Accounting Principles (GAAP). U.S. GAAP is a set of standards that direct the preparation of financial statements for U.S.-based companies traded on stock exchanges in the U.S.
Popdot, based in the European Union, is preparing its financial books. Which of the following should direct the preparation of Popdot’s financial books?
International Financial Reporting Standards (IFRS). IFRS is a set of standards that direct the preparation of financial statements for many international companies.
Near the end of a fiscal period, The Garden Spot is working on reporting its financial position, to share with investors and creditors. Which financial statement should The Garden Spot use to report this information?
Balance Sheet. The Balance Sheet shows a company’s financial position at a specific point in time, such as the end of a fiscal period.
The Garden Spot is working on reporting its net earnings for a year. Which financial statement should The Garden Spot use to report this information?
Income Statement. The Income Statement shows the results of a company’s operations over a period of time, including a company’s net income/earnings.
XXX College Computers is working on reporting changes in the company’s cash balance during a quarter. Which financial statement should College Computers use to report this information?
xBalance Sheet
The Garden Spot purchases $20,000 worth of trees they hope to resell to customers. In which of the following Balance Sheet accounts should The Garden Spot record the trees purchased?
Asset account. The inventory is now owned/controlled by the company and is expected to provide future economic benefits, so the inventory purchased should be recorded in an Asset account.
College Computers delivers $9,000 worth of laptop computers to the School of Business who will pay for them next month. In which of the following Balance Sheet accounts should College Computers record the amount it is owed by the customer?
Asset account. The right to collect payment is now owned/controlled by the company and is expected to provide future economic benefits, so the customer’s future payment should be recorded in an Asset account.
College Computers purchases $25,000 worth of laptop computers from Hewlett-Packard this month and will pay Hewlett-Packard next month. In which of the following Balance Sheet accounts should College Computers record the obligation to pay Hewlett-Packard?
Liability account. Since a future payment is probable and the event (purchasing the inventory) has occurred, the obligation to pay the supplier should be recorded in a Liability account.
The Garden Spot obtains a 4-year loan of $10,000 from a bank. In which of the following Balance Sheet accounts should The Garden Spot record the obligation to repay the loan?
Liability account. Since a future payment is probable and the event (obtaining the loan) has occurred, the obligation to repay the loan should be recorded in a Liability account.
The Garden Spot issues $50,000 worth of capital stock to investors. In which of the following Balance Sheet accounts should The Garden Spot record the change in capital stock?
Owners’ Equity account. The change in capital stock should be recorded in an Owners’ Equity account.
The Garden Spot buys back $40,000 worth of stock from investors. In which of the following Balance Sheet accounts should The Garden Spot record the change in treasury stock?
Owners’ Equity account. The change in treasury stock should be recorded in an Owners’ Equity account.
International Investment Group is looking to invest $95,000 into a company. Where should International Investment Group look for relevant information about the company’s performance?
The company’s Financial Books. Companies prepare Financial Books to communicate their economic performance and financial position to external audiences including investors and creditors.
College Computers is working on reporting its net earnings for a year. Which financial statement should College Computers use to report this information?
Income Statement. The Income Statement shows the results of a company’s operations over a period of time, including a company’s net income/earnings.
XXX The Garden Spot is working on reporting changes in the company’s cash balance during a quarter. Which financial statement should The Garden Spot use to report this information?
X Balance Sheet
