Exam 1: Uses of Accounting Information and the Financial Statements

The statement of retained earnings discloses the dividends declared during the period.

The audit committee appoints the board of directors,which in turn performs an independent audit of the company's records.

Stockholders' equity equals contributed capital minus retained earnings.

The purchase of land is an example of a(n)

Management accounting focuses on internal decision making.

Selected amounts from the condensed financial statements of Timson Corporation for 2012 and 2013 are presented below with several amounts missing.The 2011 year-end balance of retained earnings is $82,883. a.Determine the missing amounts indicated by the letters.(Hint: You should not try to find them in alphabetical order.) b.Given the data presented,did the company's profitability improve from 2012 to 2013?

An example of a monetary asset is

Most business enterprises in the United States are

The net income figure appears in all the following financial statements except the

Use this information to answer the following question. Here is the balance sheet for Marron Pickle Company,Inc.: If the balance in the Cash account were used to pay part of Accounts Payable,then total liabilities and stockholders' equity would

Net assets equals assets plus liabilities.

The heading for a balance sheet might include the line "For the Year Ended December 31,2013."

One user of accounting information with an indirect financial interest in a business is

The title "wages payable" would appear on the income statement.

Match each definition with the correct term below. -Management A.The group of people who are responsible for ensuring that a company meets its goals of profitability and liquidity. B.A unit of ownership in a corporation. C.The inflows and outflows of cash into and out of a business. D.An information system that measures,processes,and communicates financial information about an economic entity. E.A set of practices that has been developed to provide guidelines for financial accounting. F.The value of one currency in terms of another. G.The government body that regulates the issuing,buying,and selling of stocks in the United States. H.The ability to earn enough income to attract and hold investment capital. I.The oversight of a corporation's management and ethics by its board of directors. J.The accumulated earnings generated by a business's income-producing activities less amounts that have been paid out to the stockholder's. k.KEconomic events that affect a business's financial position. L.An examination of a company's financial statements and the accounting systems,controls,and records that produced them.

Carrying out professional responsibilities with competence and diligence is called

Match each definition with the correct term below. -Cash flows A.The group of people who are responsible for ensuring that a company meets its goals of profitability and liquidity. B.A unit of ownership in a corporation. C.The inflows and outflows of cash into and out of a business. D.An information system that measures,processes,and communicates financial information about an economic entity. E.A set of practices that has been developed to provide guidelines for financial accounting. F.The value of one currency in terms of another. G.The government body that regulates the issuing,buying,and selling of stocks in the United States. H.The ability to earn enough income to attract and hold investment capital. I.The oversight of a corporation's management and ethics by its board of directors. J.The accumulated earnings generated by a business's income-producing activities less amounts that have been paid out to the stockholder's. k.KEconomic events that affect a business's financial position. L.An examination of a company's financial statements and the accounting systems,controls,and records that produced them.

Paying taxes to the government is an example of an operating activity.

A company's ability to earn enough income to attract and hold investment capital ultimately depends on its

The intentional preparation of misleading financial statements,known as fraudulent financial reporting,can result from all of the following except