1. List 3 different users (stakeholders) of financial statement information.
2. Describe the main difference between Financial Accounting and Managerial Accounting.
Reports to those outside the organization:
3. Tax Authorities
Emphasize financial consequences of past activities
Emphasize objectivity and verifiability
Emphasize summary data concerning the entire organization
Must follow GAAP
Mandatory for external reports
Reports to those inside the organization for:
b) Directing and motivating ...view middle of the document...
The _______________ ________________ concept states that assets must be recorded in the financial statements at their original cost.
9. Assets on the Balance Sheet are listed in the order of ______________.
10. True or false – the collection of all accounts and their ending balances is the trial balance. This shows whether the company’s total debits equals its total credits.
11. True or false - every transaction has two sides and both sides must be in balance at all times.
12. Cash flows are broken into 3 sections for the Statement of Cash flows. Which one is not correct:
a. financing activities
b. operating activities
c. investing activities
d. ongoing activities
13. The main source of cash for a business stems from:
a. entity activities
b. financing activities
c. operating activities
d. investing activities
14. True or false – Closing the books is the process of closing and transferring the temporary accounts to Retained Earnings to reset them to $0 for the next period.
15. True or false – The permanent accounts are also closed at the end of the period.
16. Which of the following accounts does not normally have a credit balance (think of the accounting equation)?
17. Which of the following accounts does not normally have a debit balance (think of the accounting equation)?
18. On the T account, which side is the credit side, left or right?
19. Identify the financial statement/statements on which each of the following titles or accounts would appear. If it appears on more than one statement, list all statements (Income Statement, Statement of Changes in Equity, Balance Sheet, Statement of Cash Flows):
Title or Account Financial Statement(s)
a. Retained Earnings Balance Sheet
b. Revenue Income Statement
c. Common Stock Balance Sheet, Statement of Changes in equity
d. Financing Activities Statement of Cash Flows
e. Salaries Expense Income Statement
f. Land Balance Sheet
g. Ending Cash Balance Balance Sheet, Statement of Cash Flows
h. Notes Payable Balance Sheet
20. Classify items for the statement of cash flows. Indicate how each of the following activities would be classified on the statement of cash flows as operating activities (OA), investing activities (IA) or financing activities (FA):
a. Borrowed cash from the bank. FA
b. Paid cash for salary expense. OA
c. Performed services for cash. OA
d. Paid cash to purchase land. IA
e. Paid cash for utilities expense. OA
f. Sold land for cash. IA
g. Paid cash on principal of loan. FA
h. Received cash from the issuance of stock. FA
21. Why is it required by GAAP that we use accrual accounting?
To know how much spending and how much profit is making.