Accounting 1st chapter terms study – Flashcards

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question
Tonelli Trucking buys a $65,000 truck on credit. Which financial statement will be affected by this transaction?
answer
BALANCE SHEET ONLY
question
Which of the following components supplement the financial statements in an annual report?
answer
auditor's report, management discussion and analysis, notes to the financial statements, ALL OF THEM SUPPLEMENT THE FINACIAL STATEMENTS IN A ANNUAL REPORT.
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An independent audit of an annual report must be completed by a
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CERTIFIED PUBLIC ACCOUNTANT
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Which of the following financial statements would be included in an annual report?
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retained earnings statement , statement of cash flows, income statement all of the choices are correct
question
according to the basic accounting equation,
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Assets must equal liabilities plus stockholders' equity on the balance sheet.
question
Torres Travel's stockholders' equity at the beginning of March 2014 was $200,000. During the month, the company earned net income of $50,000 and paid dividends of $10,000. At the end of March 2014, what is the amount of stockholders' equity?
answer
$240,000
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The income statement does not report cash received from the sale of stock because it is not considered revenue.
answer
TRUE
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The?????? reports revenues and expenses and resulting net income or less for a period in time.
answer
INCOME STATEMENT
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Which financial statement provides information for a specific point in time?
answer
BALANCE SHEET
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Which financial statement summarizes the financial position of a company?
answer
BALANCE SHEET
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What is the primary purpose of the statement of cash flows?
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to provide information about cash receipts and cash payments
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The main purpose of operating activities is to
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generate revenue to increase profits.
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Purchasing resources that a company needs in order to operate is called
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investing activity.
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Companies can borrow money if they need a source of outside funds. Borrowing money is called
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debt financing.
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When a company borrows money from a bank to purchase equipment, this action is called
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a financing activity.
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Ethics are the principles of conduct that are used to judge whether decisions are
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honest or dishonest., moral or immoral. right or wrong. all of the choices are correct.
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Which of the following would NOT be considered internal users of accounting information for a company?
answer
customers
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Which of the following statements about accounting information is true?
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Accounting communicates financial information about a business enterprise to both internal and external users.
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Which of the following is true of a partnership?
answer
A partnership must have more than one owner.
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n owner who wants to have limited liability should form which type of business enterprise?
answer
a corporation
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