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Exam 1: A Framework for Financial Accounting

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Question 31

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Investing cash flows generally include cash receipts and cash payments for transactions involving revenue and expense activities during the period.These are operating activities.

A) True
B) False

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Question 32

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The financial statement that represents the accounting equation is the:

A) Income statement.
B) Statement of cash flows.
C) Balance sheet.

D) A) and B)
E) A) and C)

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Question 33

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Financing cash flows include cash transactions with lenders,such as borrowing money and repaying debt,and with stockholders,such as issuing stock and paying dividends.

The private sector organization that is currently responsible for setting accounting standards in the United States is the:

Of the following,the most important objective for financial accounting is to provide information useful for:

GAAP is an abbreviation for:

Cash paid for which of the following activities would affect the amount reported for operating cash flows in the statement of cash flows?

Limited liability means the stockholders are not held personally responsible for the financial obligations of the corporation.

Dividends represent a return of the company's profits to its owners,the stockholders.

Financing activities include:

Limited liability means:

Double taxation refers to a corporation's income being taxed twice-first when the company pays corporate income taxes on income it earns,and then again when stockholders pay personal income taxes when the company distributes that income as dividends to them.

The conceptual framework's qualitative characteristic of relevance includes:

Given the information below about Thomas Corporation,what was the amount of dividends the company paid in the current period? $\begin{array} { | l | r | } \hline \text { Beginning retained earnings } & \$ 54,000 \\\hline \text { Ending retained earnings } & \$ 110,000 \\\hline \text { Decrease in cash } & \$ 10,000 \\\hline \text { Net income } & \$ 84,000 \\\hline \text { Change in stockholders' equity } & \$ 15,000 \\\hline\end{array}$

How many of the following transactions are operating activities? Borrowed $50,000 from the bank Purchased $12,000 in supplies Provide services to customers for $27,000 Paid the utility bill of $750 Purchased a delivery truck for $12,000 Received $25,000 from issuing common stock

The body of rules and procedures that guide the measurement and communication of financial accounting information in the United States is known as:

The costs related to rent,utilities,and salaries in the current reporting period are examples of liabilities.These are examples of expenses.

The equation best describing the income statement is:

The 1934 Securities Exchange Act gives the Securities and Exchange Commission (SEC)the power to require companies that publicly trade their stock to prepare periodic financial statements for distribution to investors and creditors.

Which of the following is not a balance sheet item?