Exam 1: Uses of Accounting Information and the Financial Statements

Independence is the avoidance of all relationships that impair or appear to impair the objectivity of the accountant.

Buying and selling goods and services are examples of operating activities.

Following are the total assets and liabilities at the beginning and end of the year for Maren Corporation: Assets Liabilities Begingine of the year \ 70,000 45,000 End of the year 130,000 40,000 Determine the net income or loss for the year in each of the following situations: a. The stockholders made no investments in the business and no dividends were paid during the year. b. The stockholders made an investment of $20,000 and a dividend of $12,000 was paid during the year.

Corporate governance is the oversight of a company's management performance and ethics by its board of directors.

Which of the following is not one of the broad principles underlying the accountant's code of professional ethics?

Why would it be less risky for a wealthy individual to incorporate his or her business rather than to operate it as a sole proprietorship or partnership?

Generally accepted accounting principles encompass the conventions,rules,and procedures necessary to define accepted accounting practice at a particular time.

The title "supplies" will appear as an expense on the income statement.

Carrying out professional responsibilities with competence and diligence is called

Use the following accounts and information to prepare,in good form,an income statement,statement of retained earnings,and balance sheet for Cray Enterprises for the year ended December 31,2010. Accounts Payable \ 4,800 Land \ 39,000 Accounts Receivable 600 Notes Payable 6,000 Buildings 52,000 Rent Expense 3,600 Cash 26,200 Retained Earnings, 84,400 December 31, 2009 Commissions Earned 19,000 Salaries Expense 8,400 Common Stock 20,000 Supplies 400 Dividends 3,000 Insurance Expense 1,000

Which of the following represents the proper order of financial statement preparation?

The Internal Revenue Service is responsible for issuing accounting standards for state and local governments.

Creditors are those who lend money to others or deliver goods and services before being paid.

The statement of cash flows would disclose the payment of a dividend

The Federal Reserve Board is an example of an economic planner.

The International Accounting Standards Board is the primary and most important determinant of generally accepted accounting principles.

Distinguish between profitability and liquidity.

Which of the following is the most appropriate and modern definition of accounting?

Which of the following transactions involves an exchange of value?

Flores Realty Corporation had the following balance sheet accounts and balances: Accounts Payable \ 6,000 Common Stock ? Accounts Receivable 1,000 Equipment \ 7,000 Building ? Land 7,000 Cash 3,000 Retained Earnings 2,000 If the balance of the Building account were $14,000 and $3,000 of Accounts Payable were paid in cash,what would be the balance of the Common Stock account?