society.
What is meant by the term "stakeholders?"
Stakeholders are the parties that are interested in the operations of an organization. Stakeholders often are users or potential users of accounting information.
Stakeholders include resource providers, financial analysts, brokers, attorneys, government regulators and news reporters.
References
Short Answer Difficulty: 2 Medium Learning Objective: 01-01 Identify the ways accounting benefits
society.
18.
Award: 10.00 points
19.
Award: 10.00 points
20.
Award: 10.00 points
What is meant by the term "global GAAP"? How does it impact U.S. companies? What body is responsible for setting global standards?
International Financial Reporting Standards (IFRS) have been adopted by most countries outside of the United States, and are becoming "global GAAP." Many
believe that U.S. companies will be allowed to use either IFRS or U.S. GAAP in the future, and there is an ongoing process to reduce the differences between
IFRS and GAAP. The International Accounting Standards Board (IASB), headquartered in London, is responsible for forming these standards.
References
Short Answer Difficulty: 2 Medium Learning Objective: 01-01 Identify the ways accounting benefits
society.
Briefly distinguish between financial accounting and managerial accounting.
Financial accounting is designed to satisfy the needs of external resource providers (external users), and must adhere to Generally Accepted Accounting
Principles (GAAP). Managerial accounting, however, provides information that is useful to managers within a business (internal users), and does not have to
follow GAAP.
References
Short Answer Difficulty: 2 Medium Learning Objective: 01-01 Identify the ways accounting benefits
society.
What are some of the similarities and differences between not-for-profit organizations and for-profit businesses from an accounting standpoint?
Similarities: Both types of organizations add value through resource transformation. Accounting information can be useful in measuring the goods and services
provided and the efficiency and effectiveness in producing goods and providing services.
Difference: Not-for-profit organizations exist for a purpose other than earning a profit, while making a profit is a primary goal for businesses.
References
Short Answer Difficulty: 2 Medium Learning Objective: 01-01 Identify the ways accounting benefits
society.
21.
Award: 10.00 points
22.
Award: 10.00 points
23.
Award: 10.00 points
What is reported on a balance sheet?
A balance sheet shows the company’s assets, liabilities, and stockholders’ equity.
References
Short Answer Difficulty: 2 Medium Learning Objective: 01-07 Prepare an income statement, a
statement of changes in stockholders equity, and a balance sheet.
From what three sources does a business obtain its assets?
A business obtains its assets from creditors, from investors, and from operations.
References
Short Answer Difficulty: 2 Medium Learning Objective: 01-05 Interpret information shown in an
accounting equation.
How does providing services for cash affect the accounting equation? Is it considered an asset source, asset use, or asset exchange transaction?
Providing services for cash increases assets and increases stockholders’ equity. It is considered an asset source transaction.
References
Short Answer Learning Objective: 01-04 Show
how business events affect the
accounting equation.
Difficulty: 2 Medium Learning Objective: 01-06 Classify
business events as asset source,
use, or exchange transactions.
24.
Award: 10.00 points
25.
Award: 10.00 points
26.
Award: 10.00 points
How does the payment of cash dividends to stockholders affect the accounting equation? Is it considered an asset source, asset use, or asset exchange
transaction?
Paying dividends decreases assets (cash) and decreases stockholders’ equity (retained earnings). It is considered an asset use transaction.
References
Short Answer Learning Objective: 01-04 Show
how business events affect the
accounting equation.
Difficulty: 2 Medium Learning Objective: 01-06 Classify
business events as asset source,
use, or exchange transactions.
If the total stockholders’ equity is $150,000 and liabilities are $75,000, what are total assets?
Assets = Liabilities of $75,000 + Stockholders’ Equity of $150,000; Assets = $225,000
References
Short Answer Learning Objective: 01-04 Show
how business events affect the
accounting equation.
Difficulty: 2 Medium Learning Objective: 01-07
Prepare an income statement, a