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Exam 1: Introducing Financial Accounting

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Question 111

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The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.

A) True
B) False

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Question 112

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The _______________ principle requires that financial information is supported by independent, unbiased evidence.

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Question 113

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Revenue is properly recognized:

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

The idea that a business will continue to operate instead of being closed or sold underlies the going-concern assumption.

The income statement reports all of the following except:

According to the cost principle, it is necessary for managers to report an approximation of an asset's market value upon purchase.

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

At the beginning of the period, a company had $350,000 worth of assets, $110,000 worth of liabilities, and $240,000 worth of equity. Assume the only change during the period was a $30,000 purchase of equipment by issuing a note payable. Show the accounting equation with the appropriate amounts at the end of the period.

The Sarbanes-Oxley Act (SOX) does not require public companies to apply both accounting oversight and stringent internal controls.

Zippy had cash inflows from operations $60,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was:

Opportunities in accounting include auditing, consulting, market research, and tax planning.

Accounts payable appear on which of the following statements?

Creditors' claims on assets that reflect company obligations to provide assets, products, or services to others are called ____________________.

If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period, what was the effect on the assets?

Determine the net income (net loss) of a company for which the following information is available for the month of July.

The assets of a company total $700,000; the liabilities, $200,000. What are the net assets?

Another name for equity is:

______________________, which is one part of accounting, is the recording of transactions and events, either manually or electronically.