quiz 1 ACCT

Statement of Retained Earnings

The financial statements most frequently provided include all of the following except the:

Financial reporting

The process of determining how and at what cost money is allocated among competing interests.

Objective of financial reporting

To provide information about the reporting entity that is useful to present and potential equity investors.

Monetary unit

The most effective means of expressing changes in capital and exchanges of goods and services.

Due process

The term that best describes that FASB operates in full view of the public.

FASB Accounting Standards Codification

The only authoritative accounting literature.

PCAOB

Who has oversight/enforcement authority and sets auditing/quality control rules?

GAAP

The term for the whole body of FASB authoritative literature.

Deferrals

Expenses paid in cash before used/consumed.

Adjusted trial balance

Financial statements are prepared from the adjusted trial balance.

Prepaid Insurance

Which account would appear in the debit column of a post-closing trial balance?

Closing entries

A required step in the accounting cycle.

Faithful Representation

Quality of info that assures users it represents what it purports to represent.

Confirmatory Value

Info correcting past or present expectations.

Free from Error

Extent info is accurate in representing economic substance.

Completeness

Includes all info necessary for faithful representation.

Understandability

Quality that allows users to comprehend meaning.

Retained earnings

Equity.

Sales revenue

Revenues.

Additional paid-in capital

Equity (Investments by Owners).

Inventory

Assets.

Depreciation

Expenses.

Loss on sale of equipment

Losses.

Interest payable

Liabilities.

Dividends

Equity (Distributions to Owners).

Gain on sale of investment

Gains.

Issuance of common stock

Equity (Investments by Owners).

Expense Recognition Principle

Allocates expenses properly.

Going Concern Assumption

Plant assets not liquidation value.

Economic Entity Assumption

Separate personal & business.

Periodicity Assumption

Break into time periods.

Monetary Unit Assumption

Dollar as measuring stick.

Revenue Recognition Principle

Revenue when product delivered.

Full Disclosure Principle

Post-BS events disclosed.

Measurement Principle (Historical Cost)

Fair value changes not recognized.