The federal agency with ultimate authority to

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Financial Accounting: The Impact on Decision Makers
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Chapter 2 / Exercise 2-13
Financial Accounting: The Impact on Decision Makers
Norton/Porter
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13. The federal agency with ultimate authority to determine the rules for preparing statementsfor companies whose stock is sold to the public.14. The assumption that an entity is not in the process of liquidation and that it will continueindefinitely.15. The group in the private sector with authority to set accounting standards.16. The yardstick used to measure amounts in financial statements; the dollar in the UnitedStates.17. The professional organization for certified public accountants.18. A length of time on the calendar used as the basis for preparing financial statements.19. The process of examining the financial statements and the underlying records of a companyto render an opinion as to whether the statements are fairly presented.20. The organization formed to develop worldwide accounting standards.21. An act of Congress in 2002 intended to bring reform to corporate accountability andstewardship in the wake of a number of major corporate scandals.22. The excess of revenues over expenses.23. The designation for an individual who has passed a uniform exam administered by theAICPA and has met other requirements as determined by individual states.24. A five-member body created by an act of Congress in 2002 to set auditing standards.25. The financial statement that summarizes a company’s cash receipts and cash paymentsduring the period from operating, investing, and financing activities.Alternative Terms:balance sheetstatement of financial positioncost principleoriginal cost or historical costcreditorlenderincome statementstatement of income or statement of operationsnet incomeprofits or earningsstockholder shareholderstockholders’ equityshareholders’ equity
WarmUp Exercises:
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Financial Accounting: The Impact on Decision Makers
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Chapter 2 / Exercise 2-13
Financial Accounting: The Impact on Decision Makers
Norton/Porter
Expert Verified
1.Name three of your financial assets:
2.Name financial liabilities:
3.Income Statement & Balance Sheet – put it together, page 31Equations:Accounting Equation - 12: Assets = Liabilities + Owners EquityoTotal Assets = Total Liabilities +Total Stockholders’ EquityoHW 1-3Working Capital – 65: Currents Assets – Current Liabilitieso4Current Ratio -65: Current Assets/Current Liabilities o4Percentage Change in ratio:2011/2010 x 100o4Percentage Change in inventory: inventory value/total asset x100o5Percentage of Inventory: o5Percentage of account receivable: account receivable/total asset x 100o5Profit Margin Calculation: Net Income/Sales or Revenueso6Owners’ Equity: Assets = Liability + Owners Equityo3Liability Value:o3Assets Value:o3

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