Exam 1: The Role of Accounting in Business

Reporting the financial condition of a business at a point in time and the changes in the financial condition of a business over a period of time are the two major objectives of:

Review Coke-Cola's financial statements and answer the following questions: (1) What is Coke's percent of current assets to total assets on its December 31,2008 balance sheet? (2) What is Coke's percentage of curent liabilities to total sto cliholders' equity on its Decenber 31, 2008 balance sheet? (3) What is the percentage increase in cash and cash equivalent from 2007 to $2008 ?$ (4) What percentage did total assets decrease from 2007 to 2008 ?

Stockholders of a corporation are its internal stakeholders.

The branch of accounting related to the management's financial decisions is known as financial accounting.

A summary of changes in the earnings retained by the corporation for a specific period of time is known as a(n):

Under a premium-price emphasis, a business designs products that possess _____ for which customers are willing to pay a premium price.

Which of the following is not an example of a capital market stakeholder?

Name and describe the three forms of businesses and their advantages and disadvantages (if any).

A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing agreement.

John Deere is a leading manufacturer of agricultural machinery in the world producing products that serve unique market needs. Therefore, John Deere is an example of a company that uses a premium-price emphasis to attract customers.

Merchandising businesses produce products rather than provide services to customers.

Debts owed by a business are referred to as:

The ownership of a proprietorship is divided into shares of stock owned by its stockholders.

Which of the following is an intangible asset?

Expressing financial data as if a business will continue operating for an indefinite period time refers to which concept?

Match each statement with the appropriate accounting concept. (Some items may not be used. Others may be used more than once.) a. Accounting period concept b. Adequate disclosure concept c. Business entity concept d. Cost concept e. Going concern concept f. Matching conc ept g. Objectivity concept h. Unit of measure concept (1) Owners transactions are separate from business transactions. (2) Financial statements are prepared at the end of each year. (3) Land purchased for $\$ 50,000,10$ years ago, is reported on the Balance Sheet at $\$ 50,000$ . (4) December rent expense paid in January is reported with the December revenues. (5) All transactions are recorded and reported in dollars. (6) Providing a sumunary of significant accounting policies (7) Assumes that IBM will continue as a corporation forever (8) The length of time left on debt obligations is shown

A summary of revenue and expenses for a specific period of time is a(n):

Assets are acquired through investing activities when resources are purchased.

The role of accounting in business is best defined as:

Financing activities involve obtaining _____ to operate a business.