Exam 1: Accounting Principles and the Financial Statements

Which of the following groups uses accounting information primarily to help protect the public?

The International Accounting Standards Board is the primary and most important determinant of generally accepted accounting principles.

Using cash to expand by purchasing land and a building is an example of an operating activity.

A liability would not include an obligation to

Net income is a measure of profitability.

Why would it be less risky for a wealthy individual to incorporate his or her business rather than to operate it as a sole proprietorship or partnership?

Which of the following are required to swear that financial reports are accurate and complete?

Buying and selling goods and services are examples of operating activities.

Which of the following assets could be described as nonphysical?

The account 'Wages Payable' would appear on the income statement.

Chin Company's owner's equity equals one-third of the company's total assets.The company's liabilities are $120,000.What is the amount of the company's owner's equity?

The Sarbanes-Oxley Act orders the SEC to hold chief executives and CFOs responsible for the accuracy of their company's financial statements.

The Sarbanes-Oxley Act of 2002 applies to all except

Inventory is an example of a nonmonetary asset.

The recording of data falls under which stage of accounting?

Exchange rates for currency change daily according to the supply and demand for each currency.

The best definition of assets is the:

Net assets equal owner's equity.

The account 'Supplies' will appear as an expense on the income statement.

Owner withdrawals are an example of an expense.