Exam 1: Introducing Financial Statements

From the information given below,prepare a November income statement,a November statement of retained earnings,and a November 30 balance sheet.On November 1 of the current year,Victoria Garza,the sole stockholder,began Garza Décor with an initial investment of $50,000 cash in exchange for common stock.On November 30,her records showed the following items and amounts.

U.S.government bonds are:

In a business decision where there are ethical concerns,the preferred course of action should be one that:

The income statement shows the financial position of a business on a specific date.

The expense recognition principle,also called the matching principle:

Verity Siding Company,whose sole stockholder is S.Verity,began operations in May and completed the following transactions during that first month of operations.Show the effects of the transactions on the accounts of the accounting equation by recording increases and decreases in the appropriate columns in the table below.Do not determine new account balances after each transaction.Determine the final total for each account and verify that the equation is in balance.

Using the accounting equation,equity is equal to ________.

The area of accounting aimed at serving the decision making needs of internal users is:

The monetary assumption:

Identify and describe the two main groups involved in establishing generally accepted accounting principles.

An example of a financing activity is:

Cragmont has beginning equity of $277,000,net income of $63,000,dividends of $25,000 and no additional investments by stockholders during the period.Its ending equity is:

The financial statement that shows the beginning balance of retained earnings; the changes in equity that resulted from net income (or net loss); dividends; and the ending retained earnings balance,is the:

________are the increases in equity from a company's sales of products and services to customers.

The materiality constraint looks at both the importance and relative size of an amount.

A limited liability company:

External users include lenders,shareholders,customers,and regulators.

Liabilities are owner claims on assets.

The International Accounting Standards Board (IASB):

All of the following are classified as assets except: