5110 acct - Study guides, Class notes & Summaries

Funds a company receives from shareholders are often called: Paid-in capital Net income Dividends Retained earnings - Paid-in capital The Securities and Exchange Commission creates accounting standards. T/F - False Privately held companies must produce financial statements that conform to U.S. GAAP. T/F - False According to the FASB, accounting information should be (choose up to four answers): Comparable Reliable Conservative Timely - Comparable Reliable Timely The mai...

Role of financial accounting - ANSto identify, measure, and report relevant and reliable financial information about companies to present and potential future stakeholders Who are stakeholders? - ANSStakeholders are parties with an interest in a company and are impacted by companies decision. Ex; shareholders, banks, creditors, managers, customers, etc. Separation of Ownership and Control - ANSthe need to bridge the gap between the principals (investors) and agents (management) creates...

Which of the following statements is INCORRECT concerning traditional ABC? A. It assigns only the cost of used capacity to products B. All of these statements are correct C. It is expensive to build and maintain D. It provides better results than a system which uses volume-based drivers E. It is difficult to modify the system after it is in place - ANSA. It assigns only the cost of used capacity to products Which of the following statements is CORRECT? The capacity cost rate in TDABC: ...

Funds a company receives from shareholders are often called: Paid-in capital Net income Dividends Retained earnings - ANSPaid-in capital The Securities and Exchange Commission creates accounting standards. T/F - ANSFalse Privately held companies must produce financial statements that conform to U.S. GAAP. T/F - ANSFalse According to the FASB, accounting information should be (choose up to four answers): Comparable Reliable Conservative Timely - ANSComparable Reliable T...

An accrued expense is an expense - ANSincurred but not paid Recognition - ANSthe process of formally recording and reporting an item in the financial statements of a company To be relevant an earnings report is expected to have - ANSpredictive and confirmatory value Conservatism - ANSaccruing net losses on obsolete inventory A constraint on useful information - ANSbenefits > costs An example of conservatism - ANSlower of cost or market The idea that information should ...

After formulating a strategic plan, a company will engage in what three types of activities? - ANSFinancing, investing, and operating What is Financial Reporting? - ANSThe process of communicating financial accounting information to existing and potential investors, creditors, lenders, and other external decision makers. When making decisions, equity investors are interested in assessing - ANSthe company's ability to generate cash flows, management's ability to increase the capital ...

Companies' motivations for investing in debt or equity securities issued by other companies: - ANS1) To earn a high rate of return 2) To secure certain operating or financing arrangements with another company How to provide useful information - ANSCompanies account for investment based on the type of security (debt or equity) and their intent with respect to the investment. Debt securities - ANSFinancial securities that represent a creditor relationship with another entity. Examples a...