Exam 1: Accounting As a Form of Communication

The private sector group with authority to set accounting standards is the _______________________________________________.

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

Another name for net income of a business is _________________________.

The Internal Revenue Service (IRS)recognizes the separate existence of a proprietorship from its owner.

Vick Corporation has been in the business of delivering small packages for local companies within the city of Atlanta,Georgia,since 1960.The following information concerning financial activities during 2017 is available at December 31,2017: ​ ​ Delivery revenue \ 380,000 Salary and wage expense \ 82,000 Dividends declared and paid 85,000 Rent expense 43,000 Buildings 140,000 Land 60,000 Accounts payable 30,000 Accounts payable 30,000 Capital stock 105,000 Retained earnings, Water, gas, and January 1,2017 electricity 28,000 Notes payable 34,000 Cash 56,000 Income tax expense 18,000 A. Prepare an income statement for the year ended December 31,2017 . B. If you were a bank loan officer and Vick Corporation wanted to borrow $\$ 100,000$ from your bank, would you lend the money? Explain. C. Calculate retained earnings at December $31,2017$ .

The federal government agency with the ultimate authority to determine the rules in preparing statements for companies whose stock is sold to the public is the __________________________________________________.

Which of the following best describes the term "retained earnings"?

An auto repair company is not an example of a manufacturer.

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

Which of the following terms best describes a distribution of the net income of a business to its owners?

You are a potential stockholder and are concerned that a particular company you are ready to invest in might have too much debt.Which financial statement would provide you with information needed in order to evaluate your concern?

Which one of the following is a correct expression of the accounting equation?

The three forms of business entities are

Several amounts from Duggard Company at December 31,2017,are listed below.Answer the questions. ​ Service revenue \ 245,000 Salaries expense \ 109,000 Dividends declared and paid 15,000 Rent expense 36,000 Buildings 110,000 Land 100,000 Accounts payable 40,000 Accounts receivable 28,000 Capital stock 60,000 Retained earnings, Jan. 1, 2017 40,000 Utilities expense 19,000 Notes payable 30,000 Income tax payable 4,000 Income tax expense 11,000 A)Calculate net income for 2017. B)How much is Duggard Company's retained earnings at the end of 2017? C)What primary asset account is missing?

Taryn Corporation The accountant for Taryn Corporation prepared the following list of account balances from the company's records for the year ended December 31,2017: ​ ​ Sales revenue \ 165,000 Cash \ 30,000 Accounts receivable 14,000 Selling expenses 44,000 Equipment 42,000 Common stock 41,000 Accounts payable 12,000 Interest income 3,000 Sal aries and wages expense 40,000 Cost of sales 51,000 Inventories 22,000 Prepaid expenses 2,000 Income taxes payable 5,000 Income taxes expense 18,000 Notes payable 20,000 Retained earnings ? ​ -Read the information for Taryn Corporation and determine the following amounts. A) Total assets at the end of 2017__________ B) Total liabilities at the end of 2017__________ C) What parties have a claim on Taryn Corporation's assets? Explain you answer in terms of the accounting equation.

An asset is a future economic benefit to a business.

Which one of the following items does not accurately describe stockholders' equity?

The Financial Accounting Standards Board defined the objectives of financial reporting.

GAAP stands for Generally Accepted Accounting Procedures.

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