Exam 1: Accounting As a Form of Communication

What is the name of the branch of accounting concerned with providing managers and administrators with information to facilitate the planning and control of business operations?

The going concern assumption infers that a company will continue to operate indefinitely.

The primary objective of external auditors is to provide assurance to stockholders and other users that the statements are fairly presented.

All of the following are important provisions of the Sarbanes-Oxley Act except:

Assume that you have received copies of the financial statements for PepsiCo for the years ending December 31, 2014 and 2013.Answer the following questions: A) If you were a banker, why would you need information from PepsiCo's financial statements? B) If you were a potential investor in PepsiCo stock, what information would you want from their financial statements? C) If you were a labor negotiator for a union that represents a group of PepsiCo's employees, which financial statement would provide you with the most useful information?

External users of accounting information include present and potential stockholders, bankers and other creditors, and management.

The concept that assumes that assets are recorded at the amount to acquire them is called the _________________________.

Business entities and non-business entities are both organized to earn a profit.

Read the information for Canyon Corporation.Determine the following amounts for Canyon Corporation: A) Stockholders' equity at the end of 2014. B) Retained earnings at the end of 2014._______________________ C) Name two events that might cause stockholders' equity to decrease.

Volt Corp.reported the following information for the year ended December 31, 2015: How much was paid out in dividends by Volt in 2015?

The Space Corporation began 2015 with $390,000 in assets, $140,000 in liabilities, and $170,000 of retained earnings the year was $120,000, and dividends of $110,000 were declared and paid. A) Prepare a statement of retained earnings for 2015. B) What is the nature or purpose of the statement of retained earnings? C) What was the amount of capital stock for Space Corporation at the beginning of 2015? D) Identify what business events might occur in Space Corp.'s business operations that would cause the two stockholders' equity items to increase. E) How do you identify whether Space was profitable during 2015 by examining the statement of retained earnings?

Which of the following statements would be true if you own stock in a company?

Capital stock indicates the owners' contributions to a partnership.

The International Accounting Standards Board IASB) was created in order to develop worldwide accounting standards that must be used for all financial statements prepared regardless of country.

All assets are tangible in nature.

A company in the process of liquidation meets the requirements under the going concern assumption.

Stockholders' equity is owners' equity in a corporation.

Which concept is the reason the dollar is used in the preparation of financial statements?

Presented below are selected data from the balance sheet of Farmer Company for 2014.The figures are expressed in millions. A) Determine the amount of "Other assets" for Farmer's 2014 balance sheet.HINT: you must use the accounting equation concept to determine your answer.) B) How much of Farmer Company is financed by creditors? How much is financed by the owners?

Which one of the following items is correct concerning the time element of financial statements?