Which of the following is NOT one of the primary forms of business?
a) proprietorship
b) partnership
c) government unit
d) corporation
c) government unit
100
The two types of users of financial statements are?
Internal and External
100
The_________________ is the statement that records assets, liabilities and stockholder's equity of a company.
Balance Sheet
100
The basic accounting equation is:
Assets = Liabilities + Equity
100
True or False: Land is listed under property plant and equipment on the balance sheet and is depreciated.
False
200
If I was starting a lawn service by myself, what form of business that I would choose?
Sole Proprietorship
200
The group of users of accounting information charged with achieving the goals of the business is its:
Manager
200
The primary purpose of a ________________ is to provide financial information about the cash receipts and cash payments of a business.
Statement of Cash Flow
200
Claims of creditors and owners on the assets of a business are called_____________.
Liabilities
200
The account that records the right to receive money in the future is called a(n)
accounts receivable
300
My company just issued 5,000 shares of common stock, the company is probably what form of business?
A corporation
300
What does the concept of full disclosure mean for financial statement users?
Companies will disclose circumstances and events that will make a material difference in the financial statements.
300
Making a sale on account has what impact on the Cash Flow Statement? The Income Statement
No impact on the statement of CF, increases revenue on the income statement
300
True or False: If the assets owned by a business total $100,000 and liabilities total $65,000, stockholders' equity totals $25,000.
False - $35,000
300
When assets are recorded, they are recorded on the books at....
Historical Cost
400
Which of the following is NOT an advantage of the corporate form of business organization? a) No Personal Liability b) Easy to transfer ownership c) Favorable Tax treatment d) Easy to raise funds
C) A corporation DOES NOT receive favorable tax treatment
400
In order for financial statement information to be useful it must be relevant, reliable, consistent and...
Comparable
400
Name 3 items that would appear in the Current Assets section of the balance sheet:
Declaring a dividend will have what impact on the accounting equation...
Retained earnings and therefore SHE will be decreased.
400
When is something material?
When it will impact the decision of a financial statement user.
500
Jack and Jill form a partnership. Jack runs the business in New York, while Jill vacations in Hawaii. During the time Jill is away from the business, Jack increases the debts of the business by $20,000. Which partner is responsible for the company's debt.
Both
500
What type of internal financial statement user would ask the question "Do we have enough money to pay our employees?"
Human Resources
500
How are retained earnings calculated?
Beginning RE + Net income (or - a net loss) - Dividends = Ending RE
500
If revenues exceed expenses for the year, what is the impact on the accounting on the accounting equation?
Retained Earnings is increased (credited)
500
N3 Corporation has assets of $2.7 million, common stock of $700,000, and retained earnings of $500,000. What are the creditors' claims on their assets?