Chapter 1 Homework Answers

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Accounts Payable
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Which of the following items would not appear in an income statement?
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Income Statement
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Which financial statement is typically prepared first?
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Generally Accepted Accounting Principles (GAAP)
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The body of rules and procedures that guide the measurement and communication of financial accounting information is known as:
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B, C, A
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In what order are the following financial statements prepared: (A) balance sheet, (B) income statement, and (C) statement of stockholders’ equity?
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Balance Sheet
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Which financial statement reports a company’s retained earnings?
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Common Stock
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Which of the following accounts appears in the statement of stockholders’ equity?
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C
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Which of the following statements regarding financial reports is not correct? A) A balance sheet contains assets, liabilities, and stockholders’ equity information. B) An income statement shows revenues and expenses. C) A statement of stockholders’ equity reports revenues, net income, and dividends information. D) A statement of cash flows shows cash inflows and outflows from operating, investing, and financing activities.
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D
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The primary purpose(s) of financial accounting is (are) to: A) Measure and record business transactions. B) Prepare federal and state tax returns. C) Communicate financial results to investors and creditors. D) a and c
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T, T, F
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T/F- Accounting can be defined as: 1.The language of business. 2. A measurement/communication process. 3. A mathematics course.
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Partnership, Corporation, Sole proprietorship
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Select the business organization that matches with the description. A) Business owned by two or more persons. B) Entity legally separate from its owners. C) Business owned by a single person
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Assets
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Resources owned
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Liabilities
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Amounts owed
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Stockholders’ Equity
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Owners claims
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Revenues
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Sales of products and services
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Dividends
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Distributions to owners
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Expenses
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Costs of selling products or services
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Statement of Stockholders’ Equity
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Change in owners’ claims to resources
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Income Statement
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Profitability of the company.
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Statement of Cash Flows
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Change in cash as a result of operating, investing, and financing activities.
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Balance Sheet
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Resources equal creditors’ and owners’ claims to those resources.

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