Exam 1: Introduction to Financial Reporting

Match the letter of each principle or assumption or qualitative characteristic with the appropriate statement. -Directs that the measurement that has the least favorable effect on net income and financial position in the current period be selected.

Match the letter of each principle or assumption or qualitative characteristic with the appropriate statement. -The assumption that the entity being accounted for will remain in business for an indefinite period of time.

The assumption that enables us to prepare periodic statements between the time that a business commences operations and the time it goes out of business is:

Valuing assets at their liquidation values is not consistent with:

Relevance is a quality requiring that the information be timely and that it also have predictive value or feedback value or both.

Reasonable inaccuracies of accounting for an entity,short of its complete life span,are accepted.

An accounting period that ends when operations are at a low ebb is:

Match the letter of each principle or assumption or qualitative characteristic with the appropriate statement. -Deals with the problem of when to recognize revenue.

The 1933 and 1934 U.S.federal securities laws virtually gave the Securities and Exchange Commission (SEC)authority and responsibility for the development of generally accepted accounting principles.

The following data relate to Falcon Company for the year ended December 31,2012.Falcon Company uses the cash basis. Sales for cash \1 80,000 Sales for credit 190,000 Cost of inventory sold 210,000 Collections from customers 350,000 Purchases of inventory on credit 200,000 Payment for purchases 220,000 Selling expenses (accual basis) 60,000 Payment for selling expenses 70,000 Which of the following amounts represents income for Falcon Company for the year ended December 31,2012?

Other than December,the most popular month for fiscal year-end is:

The accounting principle that assumes that inflation will not take place or will be immaterial is:

Match the letter of each phrase with the appropriate definition. -Issued by the Financial Accounting Standards Board (FASB)and establish GAAP for specific accounting issues.

To the extent that money does not remain stable,it loses its usefulness as the standard for measuring financial transactions.

Many of our present financial statement figures would be misleading if it were not for the going concern assumption.

The assumption that deals with when to recognize the costs that are associated with the revenue that is being recognized is:

Predictive value,feedback value,and timeliness are ingredients needed to ensure that the information is reliable.

Accountants face a problem of when to recognize revenue.Which of the following methods of recognizing revenue is not used in practice?

The going concern assumption does not influence the classification of assets and liabilities.

The business being separate and distinct from the owners is an integral part of the: