Basics
GAAP is the acronym for ________
generally accepted accounting principles
The personal assets of the owner of a company will not appear on the company's balance sheet because of which principle/guideline?
Economic entity or Separate entity assumption
Financial accounting is focused on the _______ financial statements of a company.
A) External
B) Internal
Internal
________ -entry bookkeeping will result in at least two accounts being involved in every transaction.
Double
Which principle/guideline justifies a company violating an accounting principle because the amounts are immaterial?
Materiality principle
Corporations whose stock is publicly traded must have their financial statements _________ by independent certified public accountants.
A) audited
B) prepared
audited
The accounting equation is Assets = _________ + Stockholders' (or Owner's) Equity.
Liabilities
Which principle/guideline is associated with the assumption that the company will continue on long enough to carry out its objectives and commitments?
Going concern principle
The U.S. government agency with authority over the financial reporting requirements of publicly traded corporations is the .
a. AICPA
b. FASB
c. IRS
d. SEC
SEC (Securities and Exchange Commission)
Matching, cost, and full disclosure are examples of the fundamental or basic accounting ____________ .
principles
For U.S. companies, THIS assumption allows accountants to express a company’s wide-ranging assets as dollar amounts.
Monetary unit assumption
Cash flows are divided into three parts: (1) operating activities, (2) _________ , and (3) financing activities.
investing activities
The profitability of a company for a specified period of time is reported on the _________ statement.
Income
Accountants assume that a company’s ongoing complex business operations and financial results can be divided into distinct periods such as months, quarters, and years.
Time-period assumption
The difference between the amount of assets and the amount of liabilities.
stockholders’ equity