ACCT 217 Lecture Notes - Lecture 1: Deferred Tax, Current Liability, General Ledger

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raspberrymouse716

31 Jan 2015

School

University of Calgary

Department

Accounting

Course

ACCT 217

Professor

Anita Lakra

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Document Summary

Accounting is the information system that identifies and records the economic events of an organization and then communicates them to a wide variety of interested users. Accounting can be divided broadly into 2 types: internal users of accounting information plan, organize, and run companies, external users have several types investors, lenders, and other creditors are considered the primary users. Ethical behavior is of the utmost importance, actions are have to be both legal and responsible. Individuals can become owners of shares, shareholders have limited liability, corporations pay income tax as a separate legal entities on any corporate profits. Public corporations distribute their financial statements to everyone including the general public. Consolidated means that financial statements are not just taken from one company but from all the companies that are owned and controlled by the same people. Private corporations issue shares, they do not makes them available to the general public nor are they traded on public stock exchanges.

Related Questions

1. Creditors' claims on the assets of a company are called: (Points : 2)

2. The primary objective of financial accounting is: (Points : 2)

To serve the decision-making needs of internal users

To provide financial statements to help external users analyze and interpret an organization's activities

To monitor and control company activitiesTo provide information on both the costs and benefits of managing products and services

To know what, when and how muchto produce

3. Assets created by selling goods and services on credit are: (Points : 2)

4. The debt ratio is used: (Points : 2)

To measure the amount of equity relative to the expenses

To reflect the risk associated with a company's debts

Only by banks when a business applies for a loan

To determine how much debt a firm should pay off

5. Net Income: (Points : 2)

Decreases equity

Represents the amount of assets owners put into a business

Equals assets minus liabilities

Is the excess of revenues over expenses

Represents the owners' claims against assets

6. Internal users of accounting information include: (Points : 2)

Shareholders

Customers

Creditors

Government regulators

Line Supervisor

7. Risk is: (Points : 2)

Net income divided by average total assets

The reward for investment

The uncertainty about the expected return that will be earned from an investment

Unrelated to expected return

8. An example of an operating activity is: (Points : 2)

Paying wages

Purchasing office equipment

Borrowing money from a bank

Selling stock

Paying off a loan

9. Which accounting assumption assumes that all accounting information is reported monthly or yearly? (Points : 2)

Business entity assumption

Monetary unit assumption

Value assumption

Cost assumption

Time period assumption

10. Distributions of assets by a business to its stockholders are called: (Points : 2)

1) Fred and Barney agree while talking on the phone to form apartnership. Their partnership agreement is legally binding

a. only if it is subsequently put in writing

b. only if a subsequent writing is filed with the state

c. only if each partner gives consideration to the other

d. without any further measures

2) Hillary, a partner in an LLC, owes $100,000 personally toseveral creditors. To satisfy these debts, the creditors may obtainan order entitling them to:

a. Hillary's profits as a partner

b. Hillary's interest in partnership assets

c. both a and b

d. none of the above

3) Generally accepted accounting principles that can determinewhether an accountant is negligent, are determined by rules,releases and pronouncements of

a. the Securities and Exchange Commission

b. the American Institute of Certified Public Accountants

c. the Financial Accounting Standards Board

d. all of the above

4) How is Apparent authority created?

a. By perceptions of third parties that have been created by theprincipal

b. By agreement

c. By implication

d. By either agreement or implication

5) Schuh hired Jack for six months as an assistant sales managerat $4000 a month plus 3% of sales.

a. The agreement must be in writing and signed by the party tobe charged.

b. This is an independent contractor agreement

c. Jack must disclose to Schuh any interests that are adverse toSchuh's business

d. Jack can be dismissed at any time during the six month periodof employment

oliveprairie-dog799

Business law Agency and partnership 1.The creation of an agencyalways required a written document authorizing the agent to act forthe principal and signed by both the principal and the agent.T/F

2.No consideration is required to create an agency relationship.T/F

3.Failure to notify partner with whom an agent has dealt of hertermination can create liability to those parties under the theoryof apparent authority. T/F

4.Liability for the tortious acts of an agent will depend uponhow much control the principle had over the agent. T/F

5.General partner stand only to lose their investment in thepartnership if the partnership goes broke. T/F

6.Under the doctrine of respondent superior the principal isliable for any harm caused by his agent, when the agent is actingwithin the scope of his authority. T/F

7.If the partners fail to write down the proportional ownershipinterest then they will be presumed to be equal partners. T/F

8.In the absence of a written agreement, any partner can refuseto allow anyone to become a partner in his partnership, since it isa voluntary relationship. T/F

9.What is known by the agent is presumed to be known by theprincipal. T/F

10.A limited partnership only has limited partners. T/F

11.Limited partners have a limited right to manage thepartnership affairs. T/F

12.Partners cannot use the general partnership agreement to denythe claims of creditors of the partnership; if the assets of thepartnership are not enough to the debt of the partnership thenpartners are personally liable for the debts of the partnership.T/F

13.A partnership is not a tax paying entity, but must file a taxreturn. T/F

14.The principal of Marshaling of assets means that creditors ofan individual partner must first exhaust his assets before takingany partnership property. T/F

15.The statute of frauds does not generally require anypartnership agreement to be in writing. T/F

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ACCT 217 Lecture Notes - Lecture 1: Deferred Tax, Current Liability, General Ledger

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