Accounting for Decision Makers - C213
Chapter 1, 2, 3, and 4
Numbers - CORRECT ANSWER-Accounting is quantitative
Balance Sheet - CORRECT ANSWER-reports the resources of a company (the
assets), the company's obligations (the liabilities), and the owners' equity, which
represents how much money has been invested in the company by its owners.
Income Statement - CORRECT ANSWER-reports the amount of net income
earned by a company during a period, with annual and quarterly income
statements being the most common.
The company has suffered a loss - CORRECT ANSWER-if the expenses are
more than the revenues then
Income Statement - CORRECT ANSWER-represents the accountant's best effort
at measuring the economic performance of a company.
Statement of Cash Flows - CORRECT ANSWER-reports the amount of cash
collected and paid out by a company in the following three types of activities:
operating, investing, and financing.
Statement of Cash Flows - CORRECT ANSWER-is the most objective of the
financial statements because, as you will see in subsequent chapters, it involves
a minimum of accounting estimates and judgments.
Lenders - CORRECT ANSWER-are interested in one thing—being repaid with
interest.
Investors - CORRECT ANSWER-want information to help them estimate how
much cash they can expect to directly receive from the business in the future if
they invest in it now.
,Investors and creditors - CORRECT ANSWER-The emphasis in financial
accounting is on which of the following external user groups?
Financial Accounting Standards Board (FASB) - CORRECT ANSWER-the United
States, accounting standards are set by
FASB - CORRECT ANSWER-is not a government agency; it is a private body
established and supported by the joint efforts of the U.S. business community,
financial analysts, and practicing accountants.
Developed by accounting rule makers - CORRECT ANSWER-Generally
accepted accounting principles are
Securities and Exchange Commission (SEC) - CORRECT ANSWER-regulates
U.S. stock exchanges
SEC - CORRECT ANSWER-makes sure that investors are provided with full and
fair information about publicly traded companies.
SEC - CORRECT ANSWER-has been granted by Congress specific legal
authority to establish accounting standards for companies soliciting investment
funds
American Institute of Certified Public Accountants (AICPA) - CORRECT
ANSWER-is the professional organizations of certified public accountants in the
United States.
AICPA - CORRECT ANSWER-provides continuing educational service to its
members and also acts as a political voice to lobby on behalf of its membership.
CPA - CORRECT ANSWER-are also hired to perform independent audits of a
company's financial statements.
Sarbanes-Oxley Act created - CORRECT ANSWER-the Public Company
Accounting Oversight Board (PCAOB).
, International Accounting Standards Board (IASB) - CORRECT ANSWER-was
formed in 1973 to develop worldwide accounting standards.
International Financial Reporting Standards (IFRS). - CORRECT
ANSWER-accounting standards produced by the IASB are referred to as
International Financial Reporting Standards (IFRS).
NOT a service typically provided by large public accounting firms? - CORRECT
ANSWER-Making management decisions
Securities and Exchange Commission (SEC) - CORRECT ANSWER-has specific
legal authority to establish accounting standards for publicly held companies?
The International Accounting Standards Board (IASB) - CORRECT ANSWER-is
charged with developing worldwide accounting practices
Sarbanes-Oxley Act - CORRECT ANSWER-Increased federal oversight of the
audit process resulted from the passage of the following act of Congress
The balance sheet - CORRECT ANSWER-reports a company's financial position
at a specific point in time and lists the company's resources (assets), obligations
(liabilities), and net ownership interest (owners' equity).
The income statement - CORRECT ANSWER-describes a company's financial
performance for a designated period of time. A company's expenses are
subtracted from its revenues in computing net income.
The statement of cash flows - CORRECT ANSWER-details how a company
obtained and spent cash during a certain period of time. All of a company's cash
transactions are categorized as operating, investing, or financing activities.
Notes to the financial statement - CORRECT ANSWER-provide information on
the accounting assumptions used in preparing the statements and also provide
supplemental information not included in the statements themselves. Notes are
an integral part of the financial statements
Chapter 1, 2, 3, and 4
Numbers - CORRECT ANSWER-Accounting is quantitative
Balance Sheet - CORRECT ANSWER-reports the resources of a company (the
assets), the company's obligations (the liabilities), and the owners' equity, which
represents how much money has been invested in the company by its owners.
Income Statement - CORRECT ANSWER-reports the amount of net income
earned by a company during a period, with annual and quarterly income
statements being the most common.
The company has suffered a loss - CORRECT ANSWER-if the expenses are
more than the revenues then
Income Statement - CORRECT ANSWER-represents the accountant's best effort
at measuring the economic performance of a company.
Statement of Cash Flows - CORRECT ANSWER-reports the amount of cash
collected and paid out by a company in the following three types of activities:
operating, investing, and financing.
Statement of Cash Flows - CORRECT ANSWER-is the most objective of the
financial statements because, as you will see in subsequent chapters, it involves
a minimum of accounting estimates and judgments.
Lenders - CORRECT ANSWER-are interested in one thing—being repaid with
interest.
Investors - CORRECT ANSWER-want information to help them estimate how
much cash they can expect to directly receive from the business in the future if
they invest in it now.
,Investors and creditors - CORRECT ANSWER-The emphasis in financial
accounting is on which of the following external user groups?
Financial Accounting Standards Board (FASB) - CORRECT ANSWER-the United
States, accounting standards are set by
FASB - CORRECT ANSWER-is not a government agency; it is a private body
established and supported by the joint efforts of the U.S. business community,
financial analysts, and practicing accountants.
Developed by accounting rule makers - CORRECT ANSWER-Generally
accepted accounting principles are
Securities and Exchange Commission (SEC) - CORRECT ANSWER-regulates
U.S. stock exchanges
SEC - CORRECT ANSWER-makes sure that investors are provided with full and
fair information about publicly traded companies.
SEC - CORRECT ANSWER-has been granted by Congress specific legal
authority to establish accounting standards for companies soliciting investment
funds
American Institute of Certified Public Accountants (AICPA) - CORRECT
ANSWER-is the professional organizations of certified public accountants in the
United States.
AICPA - CORRECT ANSWER-provides continuing educational service to its
members and also acts as a political voice to lobby on behalf of its membership.
CPA - CORRECT ANSWER-are also hired to perform independent audits of a
company's financial statements.
Sarbanes-Oxley Act created - CORRECT ANSWER-the Public Company
Accounting Oversight Board (PCAOB).
, International Accounting Standards Board (IASB) - CORRECT ANSWER-was
formed in 1973 to develop worldwide accounting standards.
International Financial Reporting Standards (IFRS). - CORRECT
ANSWER-accounting standards produced by the IASB are referred to as
International Financial Reporting Standards (IFRS).
NOT a service typically provided by large public accounting firms? - CORRECT
ANSWER-Making management decisions
Securities and Exchange Commission (SEC) - CORRECT ANSWER-has specific
legal authority to establish accounting standards for publicly held companies?
The International Accounting Standards Board (IASB) - CORRECT ANSWER-is
charged with developing worldwide accounting practices
Sarbanes-Oxley Act - CORRECT ANSWER-Increased federal oversight of the
audit process resulted from the passage of the following act of Congress
The balance sheet - CORRECT ANSWER-reports a company's financial position
at a specific point in time and lists the company's resources (assets), obligations
(liabilities), and net ownership interest (owners' equity).
The income statement - CORRECT ANSWER-describes a company's financial
performance for a designated period of time. A company's expenses are
subtracted from its revenues in computing net income.
The statement of cash flows - CORRECT ANSWER-details how a company
obtained and spent cash during a certain period of time. All of a company's cash
transactions are categorized as operating, investing, or financing activities.
Notes to the financial statement - CORRECT ANSWER-provide information on
the accounting assumptions used in preparing the statements and also provide
supplemental information not included in the statements themselves. Notes are
an integral part of the financial statements
