Financial Reporting
Useful Information
Qualitative Characteristics
Assumptions
Accounting System
100
Financial reporting is most important to what type of user? Internal or External?
What is exernal
100

Ability of a company to efficiently produce goods and services for customers.

What is operating capability.

100
For information to be useful, it must have what two fundamental characteristics?
What is relevance and faithful representation
100
In the US accountants use the dollar to measure and prepare financial statements.
What is the Monetary Unit assumption
100
What is the basic accounting equation?
What is assets = liabilities + equity
200
What is the primary objective of financial reporting?
What is to provide useful information about the entity to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity.
200
Provides a measure of overall company performance for equity shareholders.
What is return on investment.
200
What is the cost constraint?
What is benefits must outweigh the costs.
200
Companies prepare and report financial statements at the end of each year.
What is the Period of Time assumption.
200
How do you calculate net income?
What is revenues - expenses + gains - losses
300
What is Management Stewardship?
Management is responsible for the custody and safekeeping of the entities resources. They protect the assets.
300
Uncertainty or unpredictability of a company.
What is risk
300
Predictive value, materiality, and neutrality. Which one of these goes with Faithful Representation?
What is neutrality.
300
States that a business enterprise is a legally and economically distinct entity.
What is the Reporting Entity assumption.
300
What is the journal entry to record a sale of land for $50,000 that originally cost $30,000.
What is a debit to cash for $50,000; credit to land for $30,000 and a credit to gain on sale for $20,000.
400

Which principle determines the appropriate period in which a company creates economic benefits and can recognize revenues in income.

What is the revenue recognition principle?

400
Ability to use its financial resources to adapt to change and to take advantage of opportunities as they arise.
What is financial flexibility.
400
Timeliness, Neutrality, Materiality, Completeness. Which one goes with Relevance?
What is materiality.
400
Dartnell company has been operating at a loss for the past six years and are having trouble settling their short-term obligations. This affects which assumption?
What is Going-Concern assumption
400
What is the adjusting entry for the earning of $2,000 of subscription revenues.
What is debit to unearned subscriptions $2,000 and a credit to Subscription revenue $2,000.
500
Expenses are recognized and matched against revenues on the basis of three principles. Which of the following is not one of the principles: Cause and effect Immediate consumption Associating cash flows Systematic and rational allocation
What is associating cash flows.
500
Arrange the following items in order of liquidity: Land Accounts Receivable Supplies Building Cash Prepaid Insurance
Cash Accounts Receivable Supplies Prepaid Insurance Building Land
500
Completeness, Comparability, Verifiability, Timeliness, and Understandability. Which one is not an enhancing characteristic?
What is completeness.
500
Historical cost, fair value, and net realizable value are all related to what assumption?
What is Mixed Attribute Measurement assumption.
500
What is the extended accounting equation
What is assets = liabilities + contributed capital + beginning retained earnings + revenues - expenses + gains - losses - dividends + beginning AOCI + OCI
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