TEST BANK for Intermediate Accounting (Volume 1 &
2), 8th Canadian Edition By Thomas H. Beechy, Joan E.
Conrod
Primary function of financial accounting is... - ANSWER: to provide useful financial
information to users who are external to the business enterprise, particularly
investors and creditors
•Accounting provides useful information about economic activity to help: - ANSWER:
-Produce good decisions
-Foster a prosperous society
The primary means of conveying financial information to external users is through... -
ANSWER: financial statements and related notes
The financial statements most frequently provided are - ANSWER: 1. The Balance
Sheet aka Statement of Financial Position
2. The Income Statement aka the Statement of Operations
3. The Statement of Cashflows
4. The Statement of Shareholders Equity
Financial accounting is chiefly concerned with... - ANSWER: providing financial
information to various external users
- Investors
Creditors
Other external users
Investors and creditors use different kinds of information to... - ANSWER: - predict
the future risk and potential return of investments or loans
- before supplying capital to businesses
Four main financial statements - ANSWER: The balance sheet shows value of a
company on a particular date - Assets liability equity
Income statement - rev - expenses
Statement of retained earnings/owners equity
Cashflow - Inflow and outflow of cash
Providers of financial information - ANSWER: Profit-oriented companies
Not-for profit entities (e.g. government entities, charitable organizations, schools)
Households
Users of financial information - ANSWER: - Investors
, - Creditors (banks, bondholders, other lenders)
- Employees
- Labor unions
- Customers
- Suppliers
- Government regulatory agencies (e.g. IRS, Securities and Exchange Commission)
- Financial intermediaries 9e.g. financial analysists, stockbrokers, mutual fund
managers, credit-rating organizations)
The term Financial Report is used to - ANSWER: refer to the process of providing
financial information to external users
external users also receive important financial information in a variety of other
formats including news releases and management forecasts, prospectuses, and
reports filed with regulatory agencies
The US is - ANSWER: a highly developed free enterprise economy with the majority
of productive resources privately owned rather than government owned.
The mechanisms that foster this efficient allocation of recourses are... - ANSWER: the
Capital Markets. They can be thought of as a composite of all investors and creditors.
They provide a mechanism to help the economy allocate resources efficiently
Corporations acquire capital from: - ANSWER: - Investors in exchange for ownership
interest
- Creditors by borrowing (Either through individual loans or publicly traded debt such
as bonds)
Why do investors and creditors provide capital? - ANSWER: •They want to earn a fair
return on the resources they provide
•Shareholders receive cash from:
-Sale of the ownership shares of stock
-Periodic dividends
Three primary forms of business are... - ANSWER: Sole proprietorship
Partnership
Corporation
(in the US Sole proprietorship and Partnerships outnumber Corporations)
The dominate form of business organization in terms of ownership of productive
resources is..... - ANSWER: The corporation
Investors - ANSWER: provide resources, usually cash to a corporation in exchange for
an ownership interest / shares of stock
2), 8th Canadian Edition By Thomas H. Beechy, Joan E.
Conrod
Primary function of financial accounting is... - ANSWER: to provide useful financial
information to users who are external to the business enterprise, particularly
investors and creditors
•Accounting provides useful information about economic activity to help: - ANSWER:
-Produce good decisions
-Foster a prosperous society
The primary means of conveying financial information to external users is through... -
ANSWER: financial statements and related notes
The financial statements most frequently provided are - ANSWER: 1. The Balance
Sheet aka Statement of Financial Position
2. The Income Statement aka the Statement of Operations
3. The Statement of Cashflows
4. The Statement of Shareholders Equity
Financial accounting is chiefly concerned with... - ANSWER: providing financial
information to various external users
- Investors
Creditors
Other external users
Investors and creditors use different kinds of information to... - ANSWER: - predict
the future risk and potential return of investments or loans
- before supplying capital to businesses
Four main financial statements - ANSWER: The balance sheet shows value of a
company on a particular date - Assets liability equity
Income statement - rev - expenses
Statement of retained earnings/owners equity
Cashflow - Inflow and outflow of cash
Providers of financial information - ANSWER: Profit-oriented companies
Not-for profit entities (e.g. government entities, charitable organizations, schools)
Households
Users of financial information - ANSWER: - Investors
, - Creditors (banks, bondholders, other lenders)
- Employees
- Labor unions
- Customers
- Suppliers
- Government regulatory agencies (e.g. IRS, Securities and Exchange Commission)
- Financial intermediaries 9e.g. financial analysists, stockbrokers, mutual fund
managers, credit-rating organizations)
The term Financial Report is used to - ANSWER: refer to the process of providing
financial information to external users
external users also receive important financial information in a variety of other
formats including news releases and management forecasts, prospectuses, and
reports filed with regulatory agencies
The US is - ANSWER: a highly developed free enterprise economy with the majority
of productive resources privately owned rather than government owned.
The mechanisms that foster this efficient allocation of recourses are... - ANSWER: the
Capital Markets. They can be thought of as a composite of all investors and creditors.
They provide a mechanism to help the economy allocate resources efficiently
Corporations acquire capital from: - ANSWER: - Investors in exchange for ownership
interest
- Creditors by borrowing (Either through individual loans or publicly traded debt such
as bonds)
Why do investors and creditors provide capital? - ANSWER: •They want to earn a fair
return on the resources they provide
•Shareholders receive cash from:
-Sale of the ownership shares of stock
-Periodic dividends
Three primary forms of business are... - ANSWER: Sole proprietorship
Partnership
Corporation
(in the US Sole proprietorship and Partnerships outnumber Corporations)
The dominate form of business organization in terms of ownership of productive
resources is..... - ANSWER: The corporation
Investors - ANSWER: provide resources, usually cash to a corporation in exchange for
an ownership interest / shares of stock
