Upgrade to remove ads
Financial Accounting Final Review
Terms in this set (49)
Owners in corporations are liable only for the amount they have invested and no more.
The annual report is a good example of tax accounting.
Presenting an asset in the balance sheet at its historical cost less accumulated depreciation is an example of
Financial accounting involves reporting financial information to
Stapling Incorporated projects sales revenues will exceed $100 million next year. This is an example of
The quality that assumes that information is reasonably free from error is
Preparing a production plan would be an example of
A partnership is the same as a proprietorship except that it is owned by two or more individuals.
a. There is no legal distinction between the business and its owner.
b. There is a distinction between the business and its owner for accounting purposes.
In a proprietorship
The SEC is the rule-making body for generally accepted accounting principles.
Prepaid items have already been converted to cash and therefore are the most liquid items in the current assets portion of the balance sheet.
The retained earnings account is a part of which of the following accounts?
The balance maintained in a checking account (also called a demand deposit or D.D.A. account) is considered a part of a company's cash account.
Which of the following is a snapshot of the financial position of the company?
Which of the following accounts represents the original investment of the shareholders?
The financial position at the end of a period is reflected on the
Long-term investments in securities are recorded on the balance sheet at their original cost, unless the market value has increased significantly, in which case they should be written up to their fair market value.
Accounts Payable is an Asset / Liability/ Owners Equity?
Investments representing short-term holding of securities would appear on the balance sheet as
Dividends are distributions of profits to the owners of a corporation, and therefore represent an expense to the firm.
Although dividends are not an expense of a company, they still impact retained earnings.
To increase the cash account, the bookkeeper will
The accounting process is concerned only with external transactions representing economic events.
increases accounts receivable
Debiting accounts receivable
An asset account
Silverstone Incorporated purchases a two-year insurance policy for $8000 cash. Silverstone debits
Blueline Incorporated had $10,000 in credit sales. The credit entry is to
Blackstone Incorporated purchased inventory for $60,000. If Blackstone paid for the inventory with cash, the right-hand side of the entry would be a credit to
credit taxes payable
To increase the taxes payable account, the bookkeeper will
Debits always increase an account, while credits decrease an account.
Credit entries to the cash account increase the account, similar to your bank statement.
Elron Company purchased office supplies on credit. This transaction had what effect on cash?
Increase in Accounts receivable decreases what?
Non cash expenses include the amortization of intangibles.
If a company pays out less than the costs incurred, the effect on cash is a(n)
Increases Accounts Payable increases what?
Increasing long-term debt is a use of cash.
Dividends to stockholders is a use of cash.
What is the impact on cash of purchasing inventory on 60 day credit?
Depreciation is added back to net income because depreciation is a non-cash expense.
Horizontal analysis compares the components of a balance sheet with a base item.
Vertical analysis compares the components of the balance sheet with a base item.
The ratio that shows how investors value the stock is
gross margin ratio
The ratio that shows the markup in price over the cost of goods sold is
profit margin ratio
What is an operating performance ratio?
The ratio that indicates the overall efficiency of the investment in and use of assets is
Since companies have different numbers of shares outstanding, it is not useful to compare earnings per share ratios.
Return on assets is sometimes called return on investment.
The quick ratio is more liquid than the current ratio.
A commercial bank uses ratios extensively to analyze their customers. Which ratio is of the utmost interest to the banker.
THIS SET IS OFTEN IN FOLDERS WITH...
Accounting Ch 2
YOU MIGHT ALSO LIKE...
invest ch. 14
invest ch. 14
Chapter 2: Introduction to Financial Statement Ana…
OTHER SETS BY THIS CREATOR
Geometry Q3 Exam Review
Geometry Q3 Exam Review