Chapter 1|96 SmartBook Ace Your Exams: Proven Strategies and Practice Questions!
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Course
SmartBook
Institution
SmartBook
retained earnings represents - ️️the total net income earned over the life of the company that has not been distributed as dividends.
Salaries already paid to employees for the month is a(n) ______ account that appears on the ______. - ️️expense; income statement
Stockholders' equity aris...
Chapter 1|96 SmartBook Ace Your
Exams: Proven Strategies and Practice
Questions!
retained earnings represents - ✔ ✔ the total net income earned over the life of the company that
has not been distributed as dividends.
Salaries already paid to employees for the month is a(n) ______ account that appears on the ______. -
✔ ✔ expense; income statement
Stockholders' equity arises primarily from amounts invested by shareholders and amounts - ✔ ✔
earned by the corporation
The accounting equation is: Assets = ______ + Stockholders' Equity. - ✔ ✔ liabilities
The accounting equation is: Assets = ______ + Stockholders' Equity. - ✔ ✔ liabilities
The accounting equation is: Assets = Liabilities + - ✔ ✔ Stockholders' Equity
The characteristic that a new accounting standard should not favor one group of companies over others
or achieve a particular social outcome is an example of - ✔ ✔ neutrality
The concept of understandability assumes that the users of financial statements should have - ✔ ✔ a
reasonable understanding of business and economic activities.
The financial statement that displays a firm's financial position on a particular date is the - ✔ ✔
balance sheet
The financial statement that is most useful in explaining a company's stock price performance is the - ✔
✔ income statement
The financial statement that provides information about cash receipts and cash disbursements for the
period is the - ✔ ✔ statement of cash flows
The financial statement that summarizes revenues and expenses for a period of time is the - ✔ ✔
income statement
According to the conceptual framework, for accounting information to be relevant, what two qualities
must it possess? - ✔ ✔ Confirmatory value
Predictive value
, According to the conceptual framework, for accounting information to be relevant, what two qualities
must it possess? - ✔ ✔ Predictive value
Confirmatory value
Amounts owed to creditors are - ✔ ✔ liabilities
an advantage of the corporate form of organization its hat a corporation - ✔ ✔ provides limited
liability to stockholders
An enhancing qualitative characteristic of accounting information that refers to the financial statement
users' ability to utilize accounting information to differentiate between companies that are reporting
similar events is - ✔ ✔ comparability
______ refers to information being available to users early enough to allow them to use it in the
decision process. - ✔ ✔ timeliness
_________ activites involve purchasing goods from suppliers, designing and manufacturing products and
selling products to customers - ✔ ✔ operational
________Statements represent a company's primary means of communicating information to external
users. - ✔ ✔ financial
A code or moral system that provides criteria for evaluating right and wrong is referred to as - ✔ ✔
ethics
A consensus among different individuals appraising the value of land describes which qualitative
accounting characteristic? - ✔ ✔ Verifiability
an income statement reports - ✔ ✔ revenues
expenses
net income or loss
Free from material error
Neutrality
Faithful representation requires that information is complete, neutral, and - ✔ ✔ free from material
error
Financial information that is immaterial in amount or nature need not be reported under GAAP. - ✔ ✔
true
Financial information that may impact investors' and creditors' decisions is referred to as
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