ACC 131 Lecture Notes - Net Income, Financial Statement, Income Statement

39 views2 pages

jadewhale488

2 Sep 2014

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

8/19/14: accounting definition- info system within a business, helps gather business transaction, process- Liquidity- the ability to pay debt when due. Cash for new opportunities: profitability- the ability to earn an adequate return on our investment. Adequate involve effort and risk: income statement (i/s) Net income (n/i) /net loss (n/l: example: revenue= . Profit margin ratio- the n/i divided by the rev: example: used lawn mower(assets) = . Profit margin (comparisons)- divided by which equals. Return on assets- (n/i) divided by (assets) equals 4 to. 1: starting a business (keep separate records) Business entity types: simplicity, tax laws, limiting personal legal liability, ability to acquire capitol, ability to transfer ownership. Sole proprietorship- such as retail: simplicity , can have tax advantages , unlimited legal liability , law sees as one unit as opposed to individuals. Partnership- 2 or more co-owners: simplicity , tax advantages , unlimited legal liability .

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)

QUESTION 1 The knowledge of financial accounting can assist people with decisions such as whether to extend credit to a business. True False 0.2 points Saved QUESTION 2 Employees of a company would not have a reason to use the information provided by financial accounting. True False 0.2 points Saved

QUESTION 3 Financial accounting should be used for assessing the financial health of large organizations only. True False 0.2 points Saved

QUESTION 4 Financial accounting can be helpful for a job candidate who is assessing the financial future of a potential employer. True False 0.2 points Saved QUESTION 5 Lenders might use the information produced by financial accounting when making loan decisions. True False 0.2 points Saved

QUESTION 6 Credit analysts prefer not to use information provided by financial accounting, as it is not accurate. True False 0.2 points Saved

QUESTION 7 Financial accounting is helpful to investment advisors. True False 0.2 points Saved

QUESTION 8 Financial accounting is more useful than managerial accounting. True False 0.2 points Saved

QUESTION 9 The decision to buy or rent equipment is an example of a decision aided by managerial accounting. True False 0.2 points Saved

QUESTION 10 Which of the following statements is true of financial accounting? A. It is used by external parties to make investment decisions. B. It is used to make lease or purchase decisions. C. Managerial accounting is another name for financial accounting, D. It is primarily used to make internal decisions of a business. E. The effectiveness of advertising can be judged using financial accounting. 0.2 points Saved QUESTION 11 The charge for using money over time, often associated with long-term loans, is known as: A. interest. B. principal. C. distribution charge. D. cash dividend. E. preferred dividend. 0.2 points Saved QUESTION 12 Which of the following is a common feature of financial and managerial accounting? A. Both have same objectives B. Both are prepared according to U.S. GAAP C. Both are reported at year end in the annual report D. Both are analyzed by external users while making investment decisions E. Both are used by the management in making decisions 0.2 points Saved

QUESTION 13 Dividends are required to be paid to stockholders on an annual basis. True False 0.2 points Saved

QUESTION 14 An individual who owns one or more shares of stock in a corporation is an owner of that corporation. True False 0.2 points Saved

QUESTION 15 Corporations do not exist as separate legal entities apart from their owners. True False 0.2 points Save Answer

QUESTION 16 It is very difficult to buy or sell ownership shares of a corporation in a stock exchange. True False 0.2 points Saved

QUESTION 17 Stock markets match up investors who wish to buy shares with those who wish to sell them. True False 0.2 points Saved

QUESTION 18 Legal process by which owners of an organization apply to a state government to have it identified as an entity legally separate from its owners is called: A. stocking. B. filling. C. attributing. D. registration. E. incorporation. 0.2 points Saved

QUESTION 19 An advantage of ownership in a sole proprietorship over ownership in a corporation is: A. tax benefits. B. having a board of directors. C. the ability to raise capital through issuance of stock. D. separation of owner and business as legal entities. E. limited liability for debts. 0.2 points Saved

QUESTION 20 Who hires the management of a corporation? A. Stockholders B. Board of directors C. Creditors D. Government E. SEC 0.2 points Saved QUESTION 21 Inventory refers to the: A. excess amount paid for an asset over its fair value. B. intangible assets of a business. C. merchandise bought or manufactured for the purpose of selling. D. amount of net income reinvested by company for future operations. E. revenue generated from investment. 0.2 points Saved QUESTION 22 Investors use financial information to predict whether a: A. company will recruit more employees. B. company's stock price will increase C. company has invested in buildings. D. company will pay salaries. E. company's bond price will increase. 0.2 points Saved

QUESTION 23 Financial accounting can be compared to a portrait. True False 0.2 points Saved

QUESTION 24 Financial statements provide the form and structure for the conveyance of financial information that will create a likeness of the reporting organization. True False 0.2 points Saved

QUESTION 25 The information reported in financial statements must be exact for an investor to make any decision. True False 0.2 points Saved

beigeant306

Question 14 pts

The five components to a system of internal controls include all of the following except:

Flag this Question

Question 24 pts

An automobile company testing brakes on new vehicles is part of:

Flag this Question

Question 34 pts

Which account would we debit to open a new petty cash fund?

cash

petty cash

miscellaneous expense

petty cash expense

Flag this Question

Question 44 pts

Our company established a petty cash fund with a balance of $200. We have petty cash receipts for travel expenses that total $125. We have counted petty cash and found that we were $2 short. Which of the following would be included in the entry to replenish the fund?

a credit to petty cash for $127

a debit to travel expenses for $125

a credit to cash over and short for $2

a credit to cash for $125

Flag this Question

Question 54 pts

On a bank reconciliation, which of the following will not appear as a deduction on a bank statement?

deposit

NSF check (non-sufficient funds)

service charge

Payments made by EFT (electronic fund transfer)

Flag this Question

Question 64 pts

Our company received a bank statement with a balance of $10,000. The reconciling items include outstanding checks that totaled $2,000 and a deposit in transit of $1,000. What is the adjusted bank balance after we complete the bank reconciliation?

Flag this Question

Question 74 pts

Our company has decided to write off an uncollectible account of $3,000. What account would we credit to record bad debt expense if our company uses the direct write-off method for bad debts?

bad debt expense

accounts receivable

allowance for doubtful accounts

cash

Flag this Question

Question 84 pts

Where does allowance for doubtful accounts appear on our financial statements?

on balance sheet as a current liability

on income statement as part of cost of goods sold

on balance sheet as a contra asset related to accounts receivable

on the statement of retained earnings as a deduction from net income

Flag this Question

Question 94 pts

At the end of 2018, we have a credit balance of $10,000 in allowance for doubtful accounts before the adjusting entry for bad debts expense. The company uses the percentage of sales method to estimate bad debt expense. The company estimates that 3% of net credit sales will be uncollectible for the year. Net credit sales for the year amounted to $1,000,000. What account and amount would we debit to record the adjusting entry for bad debt expense?

bad debt expense, $30,000

allowance for doubtful accounts, $30,000

bad debt expense, $20,000

accounts receivable, $20,000

Flag this Question

Question 104 pts

On July 1, 2017, our company accepts a 9-month 5% note for $12,000. What account and amount would we debit when we record the year-end adjusting entry on December 31, 2017?

interest revenue, $300

interest revenue, $350

interest receivable, $300

interest receivable, $350

sangriadonkey143

ACC 131 Lecture Notes - Net Income, Financial Statement, Income Statement

Document Summary

Get access

Related Documents

ACC 131 Lecture Notes - Lecture 1: Gross Margin, Profit Margin, Financial Accounting Standards Board

ACC 131 Lecture Notes - Lecture 3: Accounting Information System, Retained Earnings, Trial Balance

ACC 131 Lecture Notes - Lecture 5: Securitization, Gross Margin, Asset Management

Related Questions