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ACC 100 Midterm: Midterm Study Guide

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greydeer891
14 Apr 2011
School
Ryerson University
Department
Accounting
Course
ACC 100
Professor
Walter Krystia

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Document Summary

Learning objectives: distinguish among the forms of organizations (p. 6, corporations an entity organized under the laws of a government. Investing uses of cash to procure future benefits (assets: operating cash flows from operating activities. Identify the users of accounting information and their needs (p. 11: the primary users of financial statements are those who depend upon the economic information conveyed in those statements to make decisions. Primary users may be broadly classified as internal users and those external to the company. i. Internal users are usually managers of companies: external users include shareholders, investors, creditors, and government agencies. www. notesolution. com, financial accounting is the branch of accounting used to communicate with outsiders through financial statements. I tems of revenue, expense, gains, and losses are reflected in the income statement: summarizes revenues and expenses, ultimately, all net income (loss) and dividends are reflected in retained earnings on the balance sheet.

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Related Questions

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

1. Creditors' claims on the assets of a company are called: (Points : 2)
Ā 
Net losses
Expenses
Revenues
Equity
Liabilities
Ā 
2. The primary objective of financial accounting is: (Points : 2)
Ā 
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
Ā 
3. Assets created by selling goods and services on credit are: (Points : 2)
Ā 
Accounts payable
Accounts receivable
Liabilities
Expenses
Ā 
4. The debt ratio is used: (Points : 2)
Ā 
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
Ā 
5. Net Income: (Points : 2)
Ā 
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
Ā 
6. Internal users of accounting information include: (Points : 2)
Ā 
Shareholders
Customers
Creditors
Government regulators
Line Supervisor
Ā 
7. Risk is: (Points : 2)
Ā 
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
Ā 
8. An example of an operating activity is: (Points : 2)
Ā 
Paying wages
Purchasing office equipment
Borrowing money from a bank
Selling stock
Paying off a loan
Ā 
9. Which accounting assumption assumes that all accounting information is reported monthly or yearly? (Points : 2)
Ā 
Business entity assumption
Monetary unit assumption
Value assumption
Cost assumption
Time period assumption
Ā 
10. Distributions of assets by a business to its stockholders are called: (Points : 2)
Ā 
Dividends
Expenses
Assets
Retained earnings
Net Income

Research and discuss at least twodifferent forms of business organizations (ex.sole proprietorship, partnership,corporation, LLC, etc.). Discuss why accounting record keepingis important to the success of theorganization and how accounting systemscan help by increasing efficiency andeffectiveness.