Exam 1: Accounting As a Form of Communication

The various methods, rules, practices, and other procedures that have evolved over time in response to the need to regulate the preparation of financial statements are called __________________________________________________.

A partnership is a business owned by two individuals; if three or more individuals organize a business, it must be established as a corporation.

Surge Company reports the following information at December 31, 2015: What is Surge Company's net income?

An entity's assets come from three primary sources: creditors, investors, and profits retained in the business.

The IASB is a branch of the FASB.

Why is the time period assumption required?

Which of the following invests funds into a business and is considered an owner?

Which one of the following is not an external user of financial information?

The balance sheet is linked to the retained earnings statement by the ending retained earnings balance.

If a company prepares a statement of retained earnings, net income plus dividends are added to beginning retained earnings on this statement.

Which of the following statements is true?

The income statement is sometimes called the statement of financial position.

Information must be timely to be relevant.

Gym Corporation reported the following information at December 31, 2014: A) Calculate Gym Corporation's total assets. B) Calculate Gym Corporations' net income for 2014. C) Calculate Gym Corporation's total stockholders' equity at the end of 2014.

The reliability of the information in a company's financial statements is the responsibility of which of the following?

The three types of business activities in which all corporations engage are , ______________________, and _____________________.

Which one of the following financial statements reports an entity's financial position at a specific date?

Harbor City Corporation's end­of­year balance sheet consisted of the following amounts: What is Harbor City's retained earnings balance at the end of the current year?

On January 1, 2015, A-Best Company's balance in retained earnings was $70,000.At the end of the year, December 31, 2015, the balance in retained earnings was $94,000.During 2015, the company earned net income of $40,000.How much were dividends?

Target, Inc., started the year with total assets of $400,000 and total liabilities of $240,000.Net income for the year is $120,000 and dividends declared and paid during the year are $90,000. A) What is the amount of Target's total stockholders' equity at the end of the year? B) Could Target have paid additional dividends during the year? Explain your answer.