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INTERM ACCT EXAM I
Terms in this set (22)
Which party involved in the financial reporting process provides assurance that the financial statements prepared by management fairly present the financial position and performance of the company?
Which of the following types of information would be categorized as financial information?
All of the above
(Asset values governed by accounting standards, Footnote disclosures in annual reports, Auditor's report)
What group or organization both protects investors and oversees the accounting standard-setting process in the United States?
United States Securities and Exchange Commission
Which of the following statements correctly identifies accounting standard setters?
The FASB promulgates accounting standards in the U.S. and the IASB issues international accounting standards.
Which of the following defines fair value?
The amount at which an asset could be bought or sold in a current transaction between willing parties.
________ indicates whether financial information depicts an economic event in a way that is complete, neutral, and free from error.
Under U.S. GAAP, ________ is an example of a period-of-time element and appears on the ________.
sales revenue; income statement
The process of reporting an economic event in the financial statements is known as ________.
Shadow's Cleaning Service provides weekly cleaning services for $41 per week. In January, they collected payments from 60 customers for 3 months (12 weeks) of service each. For the month of January, they will recognize ________ of revenue under the cash basis, and ________ under the accrual basis.
If a company is facing a bankruptcy from which it is quite doubtful that the firm may ever recover, which underlying assumption would not be valid?
going concern concept
Which underlying assumption presumes that the owner's personal residence should not be included as an asset on the company balance sheet?
economic entity concept
Which attribute of a fundamental characteristic makes explicit the assumption of the full disclosure principle?
The process by which an accountant reaches a decision in situations with multiple alternatives is referred to as ________.
________ occurs when managers manipulate financial information and misrepresent the firm's financial position and performance.
Which of the following situations might influence management to intentionally bias estimates for the financial statements and impede the use of good judgment?
Management's bonuses are tied to net income.
An attitude that includes a questioning mind and a critical assessment of audit evidence is known as ________.
Caesar Company needs to purchase a new delivery truck. Rather than taking the time to research which truck would best fit the company's needs, the manager calls his friend to ask which truck he would recommend. The manager is exhibiting ________.
Bill Smith is on assignment for his first audit, when he runs into an accounting practice he's never dealt with before. Rather than asking a more experienced colleague for advice, Bill decides he knows enough to handle it. After all, he passed the CPA exam, didn't he? Bill is exhibiting ________.
Airlines Insider is a well-respected publication for the airline industry. The publication prescribes a certain accounting treatment which differs from what is indicated in the Codification. How should this be handled?
follow the treatment discussed in the codification
Liacouras Corp. had beginning of year Retained Earnings of $550,000. During 2018, the company had declared dividends of $24,000, and earned net income of $78,000. What was the balance of Liacouras Corp's Retained Earnings at the end of the year?
What is the effect on the accounting equation when a company receives payment when it provides services to a customer?
Assets increase; revenues increase
On its unadjusted trial balance, Paley Company reported $1,800 of supplies. A physical count of supplies in the supply room finds that supplies on hand at the end of the year were $250. What is the necessary adjusting journal entry?
Supplies Expense 1,550
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