Exam 1: Accounting Principles and the Financial Statements

The statement of owner's equity relates the income statement to the balance sheet by showing how the owner's capital account changed during the accounting period.

The intentional preparation of misleading financial statements is referred to as fraudulent financial reporting.

The intentional preparation of misleading financial statements,known as fraudulent financial reporting,can result from all of the following except

When a corporate stockholder sells his or her shares of stock,the corporation is technically dissolved.

The economic resources invested in a business by the owner are represented by owner's equity.

The following users of accounting information have an indirect financial interest in the business except

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

Payment to a creditor is an example of a nonexchange business transaction.

Distinguish between profitability and liquidity.

Corporations represent the largest number of businesses in the United States.

Which of the following transactions involves an exchange of value?

The purchase of equipment is an example of an investing activity.

Independence means subordinating personal gain to service and the public trust.

Which of the following is the correct accounting equation?

Use this information to answer the following question. Here is the balance sheet for Costello Container Company: -If the balance in the Cash account were used to pay part of Accounts Payable,then total liabilities and owner's equity would

How does the statement of owner's equity relate to the income statement and the balance sheet?

Due care means carrying out one's professional responsibilities with competence and diligence.

Transfer of ownership will affect the continuity of a

A company's management information system is a subsystem of its accounting information system.

The Public Company Accounting Oversight Board (PCAOB)was created to determine the standards that auditors must follow.