Goals Achievement: Chapter One
Accounting information is useful only to the owners of a business.
true Incorrect or falseCorrect
Which of the following branches of accounting is concerned primarily with external reporting or communicating the results of economic activities to parties outside the firm?
managerial accounting Incorrect or financial accountingCorrect
The objectivity principle relates to the historical-cost principle in a manner which is:
consistent Correct or inconsistentIncorrect
Many accounting measurements are based on the historical-cost principle, which holds that assets and liabilities are initially entered into the accounting records at acquisition cost, but subsequently change as market values change.
true Incorrect or falseCorrect
Which of the following areas of the accounting profession is sometimes referred to as industry accounting?
public accounting Incorrect or private accountingCorrect
Accountants have developed ethical standards that pertain to financial record keeping and reporting.
The economic resources owned by a company that are expected to benefit future periods are:
assets Correct or liabilitiesIncorrect
The residual ownership share of a particular entity may be referred to as:
assets Incorrect or owners' equityCorrect
Withdrawals of assets by the stockholders ("dividends") causes retained earnings to:
increase Incorrect or decreaseCorrect
The term "revenues" means net income.
right Incorrect or wrongCorrect
A company could experience a net loss and have dividends during the same accounting period.
true Correct or falseIncorrect
Purchase of assets for cash cause total assets to:
change Incorrect or remain the sameCorrect
Payment of accounts payable with cash cause retained earnings to:
change Incorrect or remain the sameCorrect
The income statement is a statement:
for a period of time Correct or at a point in timeIncorrect
Which financial statement most closely corresponds to the accounting equation?
balance sheet Correct or statement of cash flowsIncorrect