the primary objective of financial accounting is__________.
the accounting assumption that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the___________.
the rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the____________.
the accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the__________.
creditors' claims on the assets of a company are called____________.
the difference between a company's assets and its liabilities, or net assets is____________.
if a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000. what is the effect of the sale on the accounting equation for the seller?
net income__________.
decreases in equity that represent costs of assets or services used to earn revenues are called_________.
the statement of owner's equity_______________.
the financial statement that shows the beginning balance of owner's equity; the changes in equity that resulted from new investments by the owner, net income (or net loss); withdrawals; and the ending balance, is the_____________.
a balance sheet lists_______________.
the statement of cash flows reports all of the following except_____________.
to include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the___________.
accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.
managerial accounting is the area of accounting that provides internal reports to assist the decision making needs of internal users.
external auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.
internal users include lenders, shareholders, brokers and managers.
opportunities in accounting include auditing, consulting, market research, and tax planning.
the financial accounting standards board is the private group that sets both broad and specific accounting principles.
generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.
as a general rule, revenues should not be recognized in the accounting records until it is received in cash.
assets are the resources of a company and are expected to yield future benefits.
liabilities are the owner's claim on assets.
owner's investments are increases in equity from a company's earnings activities.
owner's equity is increased when cash is received from customers in payment of previously recorded accounts receivable.
an owner's investment in a business always creates an asset (cash), a liability (note payable), and owner's equity (investment).
every business transaction leaves the accounting equation in balance.
the income statement displays revenues earned and expenses incurred over a specified period of time due to earnings activities.
ending capital reported on the statement of owner’s equity is calculated by adding owner investments and net losses and subtracting net incomes and withdrawals.
the balance sheet shows a company’s net income or loss due to earnings activities over a period of time.
a balance sheet covers a period of time such as a month or year.
the balance sheet is based on the accounting equation.
the three major types of business activities are operating, financing, and investing.
the four basic financial statements include the balance sheet, income statement, statement of owner's equity, and statement of cash flows.
the statement of cash flows identifies cash flows separated into operating, investing, and financing activities over a period of time.
the ________________ assumption states that transactions and events are expressed in money units.
________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.
________________ activities are the means organizations use to pay for resources such as land, building, and equipment.
________________________________ reports changes in the owner's claim on the business's assets over a period of time.
____________ are the increases in equity from a company's earnings activities.
the accounting equation is ______________________________.
assets removed from the business by the business owner for personal use are called ____________.
the term ___________ refers to a liability that promises a future outflow of resources.
______________ activities involve using resources to research, develop, purchase, produce, distribute, and market products and services.
an account used to record the owner's investments in the business is called a(n)__________.
an asset created by prepayment of an expense is____________.
an accountant has debited an account for $3,500 and credited a liability account for $2,000. which of the following would be an incorrect way to complete the recording of this transaction_____________.
a $130 credit to office equipment was credited to fees earned by mistake. by what amounts are the accounts under- or overstated as a result of this error?
a credit entry_______________.
if tim jones, the owner of jones hardware proprietorship, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to____________.
the following transactions occurred during july___________: (1) received $900 cash for services provided to a customer during july. (2) received $2,200 cash investment from barbara hanson, the owner of the business. (3) received $750 from a customer in partial payment of his account receivable which arose from sales in june. (4) provided services to a customer on credit, $375. (5) borrowed $6,000 from the bank by signing a promissory note. (6) received $1,250 cash from a customer for services to be rendered next year. what was the amount of revenue for july?
the general journal provides a place for recording all of the following except____________.
the process of transferring general journal information to the ledger is___________.
a balance column ledger account is____________.
which financial statement reports an organization’s financial position at a point in time?
preparation of a trial balance is the first step in the yzing and recording process.
an account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.
when a company provides services for which cash will not be received until some future date, the company should record the amount charged as unearned revenue.
in a double-entry accounting system, the total amount debited must always equal the total amount credited.
debits increase asset and expense accounts.
crediting an expense account decreases it.
a revenue account normally has a debit balance.
accounts are normally decreased by debits.
the owner's withdrawal account normally has a credit balance since it is an equity account.
the journal is known as a book of original entry.
a journal gives a complete record of each transaction in one place, and shows the debits and credits for each transaction.
the journal is known as the book of final entry because financial statements are prepared from it.
posting is the transfer of journal entry information to the ledger.
the trial balance is a list of all general ledger accounts and their balances at a point in time.
generally, the ordering of accounts in a trial balance typically follows their identification number from the chart of accounts, that is, assets first, then liabilities, then owner's capital and withdrawals, followed by revenues and expenses.
the heading on each financial statement lists the three w's – who (the name of the organization); what (the name of the statement); and where (the organization's address).
an income statement reports the revenues earned less expenses incurred by a business over a period of time.
both u.s. gaap and ifrs prepare the same four basic financial statements.