Chapter 1 Importance of accounting

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An external user of accounting information
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Which of the following statements best represents the reason for the accounting equation?the total of everything owned by a business must always equal the total of what the business owes to creditors and owners.All of the following are part of the FASB conceptual framework:Qualitative characteristicsRecognition and measurementElementsObjectivesWhen recording transaction into the accounting equation, which of the following statements are correctafter recording the transaction, total assets will always equal total liabilities plus equity the accounting equation must always remain in balanceWhich of the statements below defines an asset?Resources controlled by the business Resources with future benefits an amount owedWhat statements explain how the accounting equation applies to businesses?the equation applies to all transaction and events the relation of assets, liabilities, and equity reflected in the equation the equation states that assets = liabilities + equity The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners.Sally Smith decided to start a sea shell business organized as a corporation. Her initial investment in the business consisted of $10,000 dollars cash in investment for common stock. Record the transaction in the accounting equation.Increase in cash and common stock.What is the order of preparing financial statements?Income statement, statement of retained earnings, balance sheet, and statement of cash flows.Given that Jacobs chocolates company had beginning retained earnings of $4,000; net income during the period of $10,000; and dividends of $300 calculate the ending balance in the retained earnings account.$13,700Jack Pickle decided to start a small business as a corporation. His initial investment was $4000 cash in exchange for common stock. Demonstrate how to record this transaction in the accounting equation.Increase Cash by $4,000; Increase Common Stock by $4,000.The correct definition of a balance sheet includes which of the following statements?The statement reports assets, liabilities and equity at a point in time. The statement reports the equality of the accounting equation at any point in time. The statement reports the financial position of a company at a point in time.Smith Company purchased $100 of supplies for her business and paid immediately. She would record this transaction in the accounting equation by which of the following?Decrease cash, Increase suppliesIdentify which of the following lists of accounts would belong on the statement of retained earningsRetained earnings and DividendsGiven the accounts below, choose all of the ones that affect equity.-Dividends-Revenues-Expenses-Common stockSheldon Company had beginning retained earnings of $1,000, net income of $5,000, and dividends of $250. The ending balance in the retained earnings account isfrom what I'm gathering, the retained earnings is what they have (1000), the INCOME is (5000) so 1000+5000=6000 but a dividend is a "negative" aspect so 6000-250=5750Which list of accounts below identifies only accounts that would appear on the balance sheet?Common stock, equipment, accounts payableBoaz Company had beginning of year assets of $100 million and end of year assets of $120 million. Boaz's net income is $5 million. Calculate Boaz Company's return on assets.4.5% ($5 million/[($100 million + $120 million/)2] = 4.5%)What is the formula for net sales