Exam 2: Selecting Your Business Structure

For the FASB, one of the primary desirable characteristics of accounting information is "relevance."

In accounting, the concept for whether different experts will agree on a measurement is

In accounting, the concept for whether information is produced quickly enough to be used in decision-making is

The financial accounting "element" that best describes a loan payable to a bank is

The financial accounting element that best describes a payment of rental expense for the company's offices for the operations during the year is

Assume that a magazine publishing company collects $120 from a customer for a 12-month subscription, but has not yet sent out any magazines when the accounting period ends. Under accrual accounting, at the time this money is collected, the books should reflect

The Rachel Corp. provides consulting services. One of its customers paid it $6,000 on December 1, 2016 for services in both December 2016 and January 2017. Rachel Corp originally recorded the receipt of this money as an increase in cash and as an increase in deferred revenues. What adjustment is required on December 31, 2016?

According to the FASB, it is desirable for companies who are uncertain of exactly what their assets are worth to report them

The amount of cash a company spends to buy a new factory is best described as which type of cash flow?

All of the following items are expenses except

Jaycox Company received $1,000 cash from the issue of stock on January 1, 2016. During 2015 the Jaycox Company earned $3,500 of revenue on account. The company collected $2,400 cash from accounts receivable and paid $3,000 cash for operating expenses. Based on this information alone

The Freddie Corp. pays its workers every Friday. This year, December 31 was a Wednesday. As of the end of the year, the employees had worked Monday, Tuesday, and Wednesday, and they had earned $3,000 for those three days. What adjustment, if any, is needed in this situation as of December 31?

The Ruth Corp. has a machine that it bought January 1, 2016, for $10,000. The machine is used in making the company's products. It expects the machine to last five years in total, and then to have zero value at the end of five years (December 31, 2020) What adjustment, if any, is needed in 2016 with regard to this machine?

The idea that expenses should be shown in financial statements in the same period in which they help the company earn revenues is referred to as

Investments a company makes in new factories should be classified as operating cash flows on a cash flow statement.

In the problem above, the cost of hiring the group's own buses is an example of a

The financial accounting "element" that best describes a dividend paid by a company to its shareholders is

Which of the following types of transaction will result in an accounting entry that will decrease the recorded equity of a medical insurance company?

There is no conceptual difference in the FASB framework between revenues and gains.

The Abex Corp. spent $10,000 on a one-year insurance policy, on April 1 of Year 1. How much insurance expense should be recognized by Abex in its December 31, Year 1 income statement?