Here is a list of words or phi uses discussed in this chapter:
- 1. Corporation
- 2. Creditor
- 3. Accounts receivable
- 4.
Partnership - 5. Stockholder
- 6. Common stock
- 7. Accounts payable
- 8. Auditor’s opinion
Instructions
Match each word or phrase with the best description of it.
_______ (a) An expression about whether financial statements conform with generally accepted accounting principles.
_______ (b) A business that raises money by issuing shares of stock.
_______ (c) The portion of stockholders’ equity that results from receiving cash from investors.
_______ (d) Obligations to suppliers of goods.
_______ (e) Amounts due from customers.
_______ (f) A party to whom a business owes money.
_______ (g) A party that invests in common stock.
_______ (h) A business that is owned jointly by two or more individuals but does not issue stock.
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Financial Accounting: Tools for Business Decision Making, 8th Edition
- What accounting policies are disclosed in the notes accompanying a companys financial statements? Why is this disclosure important?arrow_forwardWhich of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principlearrow_forwardThe metrics based on financial numbers produced by the accounting system are ________. A. quantitative factors B. qualitative factors C. stakeholders D. stockholdersarrow_forward
- According to Statement of Financial Accounting Concepts No. 8, to be relevant an earnings report is expected to have which of the following?arrow_forwardExternal users of financial accounting information include all of the following except ________. A. lenders such as bankers B. governmental agencies such as the IRS C. employees of a business D. potential investorsarrow_forwardList the three basic questions that must be answered when analyzing the effects of a business transaction on the accounting equation.arrow_forward
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- Which of the following accounting concepts do accountantsand auditors assess by using financial analyses?a. Time period. c. Full disclosure.b. Separate entity. d. Going-concern assumption.arrow_forwardEnter the letter A through H for the principle or assumption in the blank space next to each numbered description that it best reflects. A. General accounting principle B. Measurement (cost) principle C. Business entity assumption D. Revenue recognition principle E. Specific accounting principle F. Expense recognition (matching) principle G. Going-concern assumption H. Full disclosure principle 1. A company reports details behind financial statements that would impact users’ decisions. 2. Financial statements reflect the assumption that the business continues operating. 3. A company records the expenses incurred to generate the revenues reported. 4. Concepts, assumptions, and guidelines for preparing financial statements. 5. Each business is accounted for separately from its owner or owners. 6. Revenue is recorded when products and services are delivered. 7. Detailed rules used in reporting events and transactions. 8. Information is based on actual costs incurred in transactions.arrow_forwardGenerally accepted accounting principles play an important role in financial reporting.a. What is meant by the phrase generally accepted accounting principles?b. What are the major sources of these principles?c. Is there a single comprehensive list of generally accepted accounting principles? Explain. d. What types of accounting reports are prepared in conformity with generally accepted account-ing principles?arrow_forward
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