Chapter 1 Recharge

• A process of analyzing data to identify meaningful relations and trends is called data


  analytics
• According to the fraud triangle, the three factors that must exist for a person to commit fraud include __, __, and __.

  • rationalization
  • opportunity
  • pressure
• Generally accepted accounting principles (GAAP) wants information to have:

  • faithful representation
  • relevance
• Given that Jacob's Chocolates Company had beginning retained earnings of $4,000; net income during the period of $10,000; and dividends of $300 calculate the ending balance in the retained earnings account.

  $13,700
• identifies only accounts that would appear on a balance sheet.

  Common Stock, Equipment, Accounts Payable
• Return on assets is computed as Net Income divided by Total Assets.

  True or False?

  False
• part of the FASB conceptual framework:?

  Elements

  • Qualitative characteristics
  • Recognition and measurement
  • Objectives
• the rules of entering transactions into the accounting equation?

  The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.
• Which statement below defines accounting?

  It identifies, records, and communicates business transactions.
• all that affect equity?

  Expenses

  Revenues
• What are Generally Accepted Accounting Principles?

  The concepts and rules that govern financial accounting practice.
•  appear on a balance sheet?

  cash

  Accounts Payable

  Supplies

  Equipment

  Retained Earnings
• Boaz Company had beginning of year assets of $100 million and end of year assets of $120 million. Boaz's net income is $5 million. Calculate Boaz Company's return on assets. Round your answer to 1 decimal place.

  5/(100+120)/2 x 100
• Dividends are resources paid to the stockholders?


  True
• Generally accepted accounting principles (GAAP) wants information to have?

  Relevance and faithful representation
• The correct definition of a balance sheet includes which of the following statements?

  • The statement reports the equality of the accounting equation at any point in time.
  • The statement reports the financial position of a company at a point in time.
  • The statement reports assets, liabilities and equity at a point in time.
• Return on assets is computed as Net Income divided by Total Assets?

  False Return on assets is computed as Net Income divided by Average Total Assets.
• Which of the following statements explain(s) how the accounting equation applies to businesses?

  • The equation states that Assets = Liabilities + Equity.
  • The equation applies to all transactions and events.
  • The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners.
  • The relation of assets, liabilities and equity is reflected in the equation.
• The __ is the first financial statement to be prepared. Income statement
• all of the ones that affect equity?

  • Expenses
  • Dividends
  • Revenues
  • Common Stock
• lists of accounts would belong on the statement of retained earnings?

  Retained earnings and Dividends
• What are Generally Accepted Accounting Principles?

  The concepts and rules that govern financial accounting practice.
•  only accounts that would appear on a balance sheet.?

  Common Stock, Equipment, Accounts Payable
• Identify which of the following statements is correct as to why accounting is important.?

  We live in an information age whereby accounting information impacts everyone.
•  best represents the accounting equation?

  The total of everything owned by a business must always equal the total of what the business owes to creditors and owners.
• Describe the order in which a company prepares financial statements.?

  Income statement, statement of retained earnings, balance sheet, statement of cash flows.
• Identify the correct definition of an asset:?

  An asset is a resource that a business owns or controls
• Sheldon Company had beginning retained earnings of $1,000, net income of $5,000, and dividends of $250. The ending balance in the retained earnings account is?

  $5,750
• A(n) Blank______ user of accounting information does not directly run the organization.?

  External
• An employee that is having trouble paying his personal bills might exhibit the following fraud factor?

  Financial pressure
• All of the following are part of the FASB conceptual framework:?

  • Recognition and measurement
  • Objectives
  • Qualitative characteristics
  • Elements
• Which of the following statements below lists the rules of entering transactions into the accounting equation?

  The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.
• Given that Jacob's Chocolates Company had beginning retained earnings of $4,000; net income during the period of $10,000; and dividends of $300 calculate the ending balance in the retained earnings account.?

  $13,700
• The FASB conceptual framework consists of all of the following except:?

  concepts
• Which of the statement(s) below define(s) an asset?

  • An amount owned
  • Resources controlled by the business
  • Resources with expected future benefits
• The correct definition of a balance sheet includes which of the following statements?

  • The statement reports the financial position of a company at a point in time.
  • The statement reports assets, liabilities and equity at a point in time.
  • The statement reports the equality of the accounting equation at any point in time.
• An external user of accounting information?

  does not directly run the organization
• A graphical presentation of data to help in understanding their significance is called data?

  Visualization
• When recording transactions into the accounting equation, which of the following statements are correct?

  • After recording the transaction, assets will always equal liabilities plus equity.
  • The accounting equation must always remain in balance.
• Which of the following statements explain(s) how the accounting equation applies to businesses?

  • The equation states that Assets = Liabilities + Equity.
  • The equation applies to all transactions and events.
  • The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners.
  • The relation of assets, liabilities and equity is reflected in the equation.