Topic Financial Statements 219 Identify and describe the four basic financial

Topic financial statements 219 identify and describe

This preview shows page 165 - 168 out of 200 pages.

Topic: Financial Statements219.Identify and describe the four basic financial statements: The four basic financial statements are the balance sheet, income statement, statement of owner's equity, and statement of cash flows. The balance sheet describes the company's financial position and lists the types and amounts of assets, liabilities, and equity at a point in time. The income statement describes the company's revenues, expenses, and net income over a period of time. The statement of owner's equity explains changes in equity from net income or loss, and from owner investments and withdrawals over a period of time. The statementof cash flows reports on cash flows for operating, investing, and financing activitiesover a period of time.AACSB: CommunicationAICPA: BB IndustryAICPA: FN ReportingBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 01-P2 Identify and prepare basic financial statements and explain how they interrelate.Topic: Financial StatementsEssay Questions
220.The characteristics below apply to at least one of the forms of business organization.a. Is a separate legal entity.b. Is allowed to be owned by one person only.c. Owner or owners are personally liable for debts of the business.d. Is a separately taxable entity.e. Is a business entity.f. May have a contract specifying the division of profits among the owners.g. Has an unlimited lifeUse the following format to indicate (with a "yes" or "no") whether or not a characteristic applies to each type of business organization.ProprietorshipPartnershipCorporationa.b.c.d.e.f.g.ProprietorshipPartnershipCorporationa.nonoyesb.yesnoyesc.yesyesnod.nonoyese.yesyesyesf.noyesnog.nonoyesAACSB: CommunicationAICPA: BB LegalAICPA: FN Decision MakingBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 01-C4 Explain generally accepted accounting principles and define and apply severalaccounting principles.Topic: Generally Accepted Accounting Principles
221.A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer? $570,000. The cost principle requires the acquisition of an asset to be recorded in the accounting records at cost.AACSB: Analytical ThinkingAICPA: BB IndustryAICPA: FN MeasurementBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 01-C4 Explain generally accepted accounting principles and define and apply severalaccounting principles.Topic: Generally Accepted Accounting Principles222.You are reviewing the accounting records of Buddy's Foreign Automotive, owned byBruce Jones. You have uncovered the following situations. List the appropriate accounting principle related to each independent scenario and suggest a correct action for each.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture