Exam 1: Introduction to Business Activities and Overview of Financial Statements and the Reporting Process

Hemd Company has liabilities equal to one fourth of the total assets. Hemd's shareholders'equity is €60,000. Using the accounting equation, what is the amount of liabilities for Hemd?

The following information is reported by ComCo, a Singapore company; all figures are in millions of Singapore dollars ($).The firm reported revenues of $15,882, cost of goods sold of $13,671, interest and other expenses of $2,113, and tax expense of $67.It also reported $14,894 in cash receipts from customers, $102 in miscellaneous cash receipts, $6,447 in cash payments to employees and creditors, $6,861 in cash payments for milk, $402 in cash payments for interest, and $64 in cash payments for taxes. Required: 1)Calculate net income and its net cash flow. 2)Explain why ComCo's net income is so much different than its net cash flow.

As of 2011, the _____ is an independent accounting standard-setting entity with 15 voting members from a number of countries.

Determine the missing amount "X" for each of the following: Assets Liabilities Shareholders' Equity a. \ 85,700 \ 40,000 b. \ 66,570 \ 145,000 c. \ 57,900 \ 34,000

Assets are economic resources with the potential to provide future economic benefits to a firm.

_____ is a private-sector financial accounting standard setter that promulgates accounting standards that are required or permitted to be used in over 100 countries, but has no enforcement powers.

Who provides an opinion that reflects their professional conclusions regarding the financial statements and for most publicly traded firms in the U.S.also provides a separate opinion on the effectiveness of the firm's internal controls over financial reporting?

A(n) _____ item is expected to generate cash over periods longer than a year or use cash over periods longer than a year.

_____ measure the outflow of assets (or increases in liabilities) used in generating revenues.

U.S.GAAP and IFRS contain broad guidance on what the financial statements must contain, but neither completely specifies the level of detail or the names of accounts.

Compute the missing information in each of the four independent cases below.The letters in parentheses refer to the following: BS - Balance sheet IS - Income statement SCF - Statement of cash flows a. Accounts Receivable, Jan. 1, Year 2 (BS) \ 500 Sales on Account for Year 2 (IS) 1900 Collections from Customers on Account during Year 2 (SCF) 1,350 Accounts Receivable, Dec. 31, Year 2 (BS) -?- b. Salaries Payable, Jan. 1, Year 2 (BS) \ 175 Salary Expense for Year 2 -?- Payments to Salaried Employees during Year 2 (SCF) 725 Salaries Payable, Dec. 31, Year 2 (BS) 100 c. Equipment (net of depreciation), Jan. 1, Year 2(BS) \ 900 Depreciation Expense for Year 2 (IS) -?- Sales of Equipment during Year 2 (SCF) -0- Acquisition of Equipment during Year 2 (SCF) 330 Equipment (net of depreciation), Dec. 31, Year 2 (BS) 910 d. Retained Earnings, Jan. 1, Year 2 (BS) \ 1,550 Net Income for Year 2 (IS) 400 Dividends Declared and Paid during Year 2 (SCF) -?- Retained Earnings, Dec. 31, Year 2 (BS) 1,350

Who evaluates the accounting system, including its ability to record transactions properly and its operational effectiveness, and also determines whether the financial reports prepared conform to the requirements of the applicable authoritative guidance?

Who are the users of financial statements and what do they need?

In the United States, regulatory requirements applicable to publicly traded firms require the inclusion of a(n) _____, in which management discusses operating results, liquidity (sources and uses of cash), capital resources, and reasons for changes in profitability and risk during the past year.

Liabilities are creditors' claims for funds, usually because they have provided funds, or goods and services, to the firm.

The income statement of Peoples Motors Corporation, a U.S.automotive manufacturer, for the year ended December 31, 20x1, reported revenues of $207,000, cost of sales of $165,000, other operating expenses, including income taxes of $50,000, and net financing income, after taxes, of $6,000. Compute the amount of net income or loss that Peoples Motors reported for 20x1.

Goals are the end results toward which the firm directs its energies, and strategies are the means for achieving those results.

As a basis for measuring performance for a particular accounting period, the cash basis of accounting has three weaknesses.Briefly describe the three weaknesses.

What is the best definition of an accounting period?

_____ are the amounts at which items entered the firm's balance sheet and reflect economic conditions at the time the firm obtained assets or obtained financing.