216) Match the following definitions with terms 1 through 8. Place the letter that identifies the best definition in the blank space next to the term.
____ 1. Generally accepted accounting principles
____ 2. Time period assumption
____ 3. Statement of owner's equity
____ 4. Balance sheet
____ 5. Income statement
____ 6. Measurement (Cost) principle
____ 7. Securities and Exchange Commission
____ 8. IASB
____ 9. Full disclosure principle
____10. Statement of cash flows
a. Prescribes that assets and services to be recorded initially on a cash or equal-to-cash basis.
b. Describes a company's revenues and expenses and computes net income or loss over a period of time.
c. An independent group consisting of individuals from many countries that identify preferred accounting practices.
d. Presumes that the life of a company can be divided into periods for reporting purposes.
e. The concepts and rules that govern financial accounting.
f. A financial statement that reports the changes in equity over the reporting period; including increases such as owner investment and net income and for decreases such as owner withdrawals or net loss.
g. A report that identifies cash receipts and cash payments over a period of time.
h. Prescribes that a company report the details behind financial statements that would impact user decisions.
i. The governmental agency that has the legal authority to establish accounting rules.
j. A report that describes a company's financial position at a point in time.
217) Match the following definitions with the terms 1 through 9. Place the letter that identifies the best definition in the blank space next to the term.
____ 1. Statement of cash flows
____ 2. Events
____ 3. Monetary unit principle
____ 4. Business entity principle
____ 5. Revenue recognition principle
____ 6. Accounting equation
____ 7. Income statement
____ 8. Expenses
____ 9. Liabilities
a. The relation between a company's assets, liabilities, and equity.
b. Happenings, such as changes in market value, that effect the accounting equation and are reliably measured.
c. The principle that assumes transactions and events can be expressed in money units.
d. Describes a company's revenues and expenses along with the resulting net income or loss over a period of time.
e. A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing, and financing activities.
f. Creditor's claims on assets.
g. The cost of assets or services used to earn revenue.
h. The principle that requires a business to be accounted for separately from its owners.
i. The principle that revenue is recorded when earned through providing goods or services.
218) Identify each of the following business activities 1 through 6 into the appropriate category a, b, and c.
a. Operating
b. Investing
c. Financing
____ 1. Paid utilities expenses.
____ 2. Withdrawal of funds by owners.
____ 3. Purchase of land.
____ 4. Sale of used equipment.
____ 5. Borrowed money from a bank on a long-term note.
____ 6. Paid employee wages.
____ 7. Received investment from owner.
____ 8. Paid an amount due on a long-term bank loan.
219) Match each of the following items 1 through 8 with the financial statement a through d in which each item would most likely appear. An item may appear on more than one statement.
a. Income statement
b. Statement of owner's equity
c. Balance sheet
d. Statement of cash flows
_____1. Assets.
_____2. Withdrawals.
_____3. Revenues.
_____4. Cash from investing activities.
_____5. Expenses.
_____6. Liabilities.
_____7. Cash from operating activities.
_____8. Cash from financing activities.
220) Classify the following activities according to the appropriate section of the statement of cash flows.
a. Operating activity
b. Investing activity
c. Financing activity
____ 1. Cash received from a one-time sale of used office equipment.
____ 2. Cash paid for withdrawals by owners.
____ 3. Cash received from customers.
____ 4. Cash received from owner contributions.
____ 5. Cash paid for utilities.
____ 6. Cash paid for a delivery van to be used in the business.
221) Explain the role of accounting in the information age.
222) What is the balance sheet? What is its purpose?
223) Identify the users and uses of accounting information.
224) Identify several opportunities in accounting and distinguish between private accounting and public accounting.