Exam 1: Accounting Principles and the Financial Statements

All of the following statements about partnerships are true except

Financial position may be assessed by referring to a balance sheet.

Generally accepted accounting principles encompass the conventions,rules,and procedures necessary to define accepted accounting practice at a particular time.

On the right side of the accounting equation are two types of claims against resources.Explain what they are and give an example of an item that would increase each.Which type of claim has priority?

At the beginning of the year,Pullman Company's assets were $270,000 and its owner's equity was $201,000.During the year,assets decreased by $35,000 and liabilities increased by $10,000.What was owner's equity at the end of the year?

Creditors are those who lend money to others or deliver goods and services before being paid.

Those who lend money or deliver goods and services before being paid are called

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

Accounts Receivable is an asset that is considered nonmonetary in nature.

Two major goals of business are to achieve profitability and to achieve liquidity.