ACCTCY 2036

tangible assets - Answer physical assets, such as real estate and automobiles, that can be held for either consumption or investment purposes Depreciation Expense - Answer The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life. types of depreciation - Answer - straight-line - units of production - double declining balance

Long-Lived Assets - Answer resources owned by a business that enable it to produce the goods or services that are sold to customers. Ex: machines, equipment, vehicles Capitalize - Answer To record a cost as an asset, rather than an expense. Ordinary repairs and maintenance - Answer expenditures for routine operating upkeep of long-lived assets; they are recorded as expenses Extraordinary repairs - Answer expenditures that extend the useful ife of a tangible ass...

Types of employee Fraud - Answer corruption, asset misappropriation, financial statement fraud fraud triangle - Answer opportunity, incentive, rationalization Sarbanes-Oxley Act (SOX) purpose - Answer to reduce fraud amongst public companies Requirements and Goals of SOX - Answer counteract incentives, reduce opportunities, encourage honesty counteract incentives - Answer those who willfully misrepresent financial results face stiff penalties, including ...

Major advantage of the corporate form of business - Answer -the ease of raising capital as both large and small investors can participate in corporate ownership -simple to become an owner -easy to transfer ownership -provides limited liability Because a corporation is a separate legal entity, it can... - Answer -own assets -incur liabilities -sue and be sued -enter into contracts Stockholder benefits - Answer -voting rights -dividends -residual claims -preemptiv...

Liabilities are created when a company: - Answer -buys goods and services on credit -obtains short-term loans -issues long-term debt ***current liabilities are short-term obligations that will be paid with current assets within the company's current operating cycle or within one year of the balance sheet date, whichever is longer Measuring liabilities - Answer initial amount of the liability =cash equivalent additional liability amounts= increase liability payments made =d...

Fraud Definition - Answer An attempt to deceive others for personal gain 3 Parts of Fraud Triangle - Answer Incentive, rationalization, opportunity Internal Control Objectives - Answer Actions taken by all levels of an organization to achieve its objectives Why can't internal control completely prevent and detect errors and fraud? - Answer Human error/fraud - Benefits must exceed the costs Why are internal controls for cash important? - Answer Because...

Auditing is an example of which principle of control activities? - Answer Independently verifies Which factor of the Fraud Triangle stems from weak internal controls? - Answer Opportunity When are payments out of petty cash recorded in the accounting system? - Answer When the fund is replenished A situation where a fraudster (one who commits fraud) perceives a misdeed as unavoidable or justified is an example of which factor of the fraud triangle? - Answer Ration...

Accounting System - Answer What is the main goal of an accounting system? - Answer To capture information about the operating, investing, and financing activities of a company so that it can be reported to decision makers, both inside and outside the business Managerial accounting reports - Answer include detailed financial plans and continually updated reports about the operating performance of the company -only available to employees of company (internal users) B...

Balance Sheet - Answer Financial statement that reports the types and the monetary amounts of a company's assets, liabilities, and owner's equity on a specific date. Classified Balance Sheet - Answer This balance sheet shows subtotals for assets, liabilities, and owner's equity in related groupings. Assets - Answer Company's economic resource. Current Assets - Answer Cash and other assets the company expects to convert into cash, sell up, or use withi...