Exam 1: Uses of Accounting Information and the Financial Statements

Par value is the minimum amount that can be reported as contributed capital.

Authorized shares of stock refers to the number of shares authorized in the articles of incorporation..

The Securities and Exchange Commission (SEC)is an accounting information user with a direct financial interest.

Use the following information to calculate at,or for the year ended,December 31,2013,(a)net income,(b)retained earnings,(c)total assets,and (d)cash.

The separate entity concept requires that

Sole proprietorships in the United States generate more revenue than partnerships and corporations put together.

Use the following accounts and information to prepare,in good form,an income statement,statement of retained earnings,and balance sheet for Hometown Industries for the month ended July 31,2013.

Regulatory agencies are considered information users with an indirect financial interest.

The Public Company Accounting Oversight Board (PCAOB)was created to determine the standards that auditors must follow.

Which of the following is one of the broad principles underlying the accountant's code of professional ethics?

All of the following will affect retained earnings except

The terms bookkeeping and accounting are not synonymous.

Which of the following items has no effect on stockholders' equity?

For reporting purposes,the personal assets and debts of a business owner should not be combined with the assets and debts of the business.

Match each definition with the correct term below. -Accounting 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.

Land is an asset that is considered nonmonetary in nature.

Glascock Corporation had a balance in Retained Earnings on December 31,2012,of $520,000.During 2013,the company reported a net income of $224,000 after taxes.During 2013,the company declared and paid cash dividends totaling $32,000.Prepare the company's statement of retained earnings for the year ended December 31,2013.

The development of international accounting standards is the primary function of the

What is the responsibility of the auditing firm? Who is responsible for the content of the financial statements?

The processing stage of accounting is accomplished by the recording of data.