5 Written Questions

1. Share of ownership in corp; amount owners paid to get the stock is part of contributed capital on balance sheet
2. Group of professional business people, accountants, and accounting scholars in private sector; Responsible for setting current accounting standards
3. Negative amount results when expenses are greater than revenues aka "in the red"
4. Cash transactions related to purchase and sale of assets that last longer than a yr
5. Diff btwn revenues and expenses when revenues exceed expenses for a specific pd of time aka net earnings

5 Matching Questions

1. Securities and Exchange Commission (SEC)
2. Liabilities
3. Ratio analysis
4. Dividends
5. Notes to the financial statements

1. a info describes comp's major acct policies; provides other disclosures to help external users better understand the financial statements
2. b Distributions of a firm's earnings to its shareholders
3. c Amounts business owes to creditors; comp's debts
4. d Gov ag; Created by Congress to reg stock market, estab and enforce reporting standards for publicly traded companies
5. e Using ratios to analyze form's past performance and forecast its future performance

5 Multiple Choice Questions

1. Broad set of accounting guidelines firm must follow prepping financial statements
   1. Certified Public Accountant (CPA)
   2. Generally Accepted Accounting Principles (GAAP)
   3. Financial Accounting Standards Board (FASB)
   4. Public Company Accounting Oversight Board (PCAOB)
2. Expression of mathematical relationship btwn one quantity and another
   1. Ratio
   2. 10-K
   3. Profit
   4. Audit
3. Financial statement summarizes all cash that has come into a business (Cash receipts) and all cash that has gone out (Cash payments) during acct pd
   1. Statement of retained earnings
   2. Statement of cash flows
   3. Net loss
   4. Ratio analysis
4. Law passed by Congress; sets new regs for ways corps govern themselves; including requirements to make a corp's internal controls more effective and procedures for increasing understandability of financial reporting
   1. Income statement
   2. Sarbanes-Oxley (SOX) Act of 2002
   3. Statement of cash flows
   4. Transaction
5. Comprehensive summary of comp's performance firms are required to submit to SEC within 60 days of end of comp's fiscal yr
   1. Audit
   2. Ratio
   3. Assets
   4. 10-K

5 True/False Questions

1. Assets → Economic resources owned by business as result of past transactions; will be used in future to generate benefits for business

   True        False

2. Audit → Expression of mathematical relationship btwn one quantity and another

   True        False

3. Profit → Diff between revenue and the costs of earning that revenue REVENUE - COST

   True        False

4. Balance sheet → One of four basic financial statements that shows financial position of firm AT SPECIFIC POINT IN TIME aka statement of financial position

   True        False

5. Accounting equation → Assets = Liabilities + Owners' Equity aka balance sheet equation

   True        False