Chapter One Cards Answers – Flashcards
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The primary purpose of accounting
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To identify, record, and communicate business transactions
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Technological advancement
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has freed accounting professionals to concentrate more on the analysis and interpretation of information
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Line supervisor: internal or external
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internal
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the primary objective of financial accounting is
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to provide financial statements to help external users analyze and interpret an organization's activities
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Internal users of accounting always include
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managers
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managerial accounting
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the area of accounting aimed at serving the decision making needs of internal users
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the financial functions of a business include
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selling common stock, loaning, issuing bonds
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external information users have ___ access to accounting information
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have limited access to an organization's accounting information
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time period assumption
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assumes that all accounting into is reported monthly or yearly
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matching principle
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dictates when expenses are recognized; record expenses at the same time as revenue
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The heading for ABC Company's 2010 balance sheet would be
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ABC Company, Balance Sheet, 12/31/10
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The Salaries Expense is found on a (form)
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an income statement
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an asset is
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something the company owns
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ethical behavior requires
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that an auditors' pay not depend on the figures in the client's reports
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social responsibility
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is a concern for the impact of one's actions on society as a whole
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retained earnings are found on the (form)
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balance sheet
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objectivity principle
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guideline prescribing that financial statement information be supported by independent unbiased evidence other that someone's belief or opinion
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a corporation
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legal entity separate and distinct from its owners
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GAAP
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intend to make information on the financial statements relevant, reliable, and comparable
