Chapter 1 – Accounting

The primary objective of financial reporting is to provide information.
Useful for making investment and credit decisions.
Which type of business organization provides the least amount of protection for bankers and other creditors of the company
Corporation
Assets are usually reported at their
Historical Cost
January, Asset increased by 20,00 and liabilities increased by 4000, then stock holders equity increased by
16,000
The amount of a company expects to collect from customers appears on the
Balance sheet in the current assets section
All of the following are current assets except
Sales Revenue (not a current asset)
Revenues are
Increases in retained earnings resulting from selling products or performing services
The financial statement that reports revenues and expenses is called the
Income statement
Another name for the balance sheet is the
Statement of financial position
Baldwin Corp began with 35,000
$70,000
Quarts instruments had retained earnings of $145,000 at December
$205,000
Net income appears on which financial statements
Income statement AND statement of retained earnings. (BOTH A & B)
cash paid to purchase a building appears on the statement of cash flows among the
Investing activities
The stockholders equity of Chernasky Company at the beginning and end of 20X0 were $25,000
$36,000
Drexel Company had the following on the dates indicated
$180,000

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