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A system of maintaining records of a company's operations and communicating that information to decision makers |
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Equation that shows a company's resources (assets) equal creditors' and owners' claims to those resources (liabilities and stockholders' equity). |
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Resources owned by a company |
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A financial statement that presents the financial position of the company on a particular date. |
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An entity that is legally separate from its owners. |
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Cash payments to stockholders. |
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Costs of providing products and services. |
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Measurement of business activities of a company and communication of those measurements to external parties for decision-making purposes. |
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Periodic reports published by the company for the purpose of providing information to external users. |
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Transactions involving external sources of funding. |
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The rules of financial accounting. |
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Generally accepted accounting principles (GAAP) |
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A financial statement that reports the company's revenues and expenses over an interval of time. |
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Transactions involving the purchase and sale of (1) long-term resources such as land, buildings, equipment, and machinery and (2) any resources not directly related to a company's normal operations. |
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Difference between revenues and expenses. |
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Transactions involving the primary operations of the company, such as providing products and services to customers and the associated costs of doing so, like utilities, taxes, advertising, wages, rent, and maintenance. |
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Cumulative amount of net income earned over the life of the company that has not been distributed to stockholders as dividends. |
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Amounts earned from selling products or services to customers. |
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Formally titled the Public Company Accounting Reform and Investor Protection Act of 2002, this act provides regulation of auditors and the types of services they furnish to clients, increases accountability of corporate execu- tives, addresses conflicts of interest for securities analysts, and provides for stiff criminal penalties for violators. |
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A financial statement that measures activities involving cash receipts and cash payments over an interval of time. |
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Stockholders', or owners', claims to resources, which equal the difference between total assets and total liabilities. |
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Financial accounting does not deal with which of the following? |
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Making business decisions. |
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Which of the following groups is not among the external users for whom financial statements are prepared? |
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Provides information primarily for external decision makers. |
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The primary purpose(s) of financial accounting is (are) to: |
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Definition
Measure and record business transactions and Communicate financial results to investors and creditors. |
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Which statement below best describes the accounting equation? |
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Definition
Resources of the company equal creditors' and owners' claims to those resources. |
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Emmitt had the following final balances after the first year of operations: assets, $55,000; stockholders' equity, $25,000; dividends, $3,000; and net income, $10,000. What is the amount of Emmitt's liabilities? |
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Transactions of a company involving external sources of funding are referred to as: |
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Transactions of a company that include the purchase and sale of long-term productive assets are referred to as: |
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Stockholders of a corporation are not obligated to pay the corporation's debts out of their own pocket. |
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The costs of providing goods and services to customers are referred to as: |
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The accounts which represent the resources of the company are called: |
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The owners' interest in a corporation is called: |
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The costs associated with producing revenues are referred to as: |
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The financial statement that represents activity over the entire life of the company is the: |
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Which of the following is the correct order for preparing the financial statements? |
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Definition
Income statement, statement of stockholders' equity, and balance sheet. |
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The financial statement(s) that record activity over an interval of time is (are) |
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Income statement and statement of cash flows. |
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Which of the following items would not appear in an income statement? |
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Which of the following statements regarding financial reports is not correct? |
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Definition
A statement of stockholders' equity reports revenues, net income, and dividends information. |
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Retained earnings at the end of the year is calculated using: |
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Beginning retained earnings, net income, and dividends. |
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The financial statement that represents the accounting equation is the: |
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Which of the following items is reported in the statement of stockholders' equity? |
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Net income appears in which two financial statements? Income statement and statement of stockholders' equity. |
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Income statement and statement of stockholders'equity |
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The independent, private-sector group that is primarily responsible for setting financial reporting standards in the United States is the: |
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Which statement below best describes the objectives of financial accounting? |
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Definition
A. Provide information that helps predict cash flows. B. Provide information about the economic resources, claims to resources and changes in resources and claims. C. Provide information that is useful in making decisions. D. All of the above are correct. |
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An accounting form that is used to record the increases and decreases in each financial statement item. |
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Assets used up or services consumed in the process of generating revenues. |
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A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners, yet treated as a partnership for tax purposes. |
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Items such as supplies that will be used in the business in the future, and are assets. |
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The liability created by receiving revenue in advance. |
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Expenses that have been incurred but not recorded in the accounts |
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