Intro To Financial Accounting Exam 1 questions and answers 100% verified.

Intro To Financial Accounting Exam 1 questions and answers 100% verified. Accounting consists of three basic activities - correct answers.Identifies, records, communicates Who uses Accounting Data - correct answers.External Users: Creditors and Investors Recent Financial Scandals - correct answers.Enron, WorldCom, HealthSouth, AIG Sarbanes-Oxley Act of (SOX). - correct answers.Added new criminal charges for accounting scandals Financial Statements - correct answers.Balance Sheet Income Statement Statement of Stock Holder's Equity Statement of Cash Flows Note Disclosure Generally Accepted Accounting Principles (GAAP) - correct answers.Standards generally accepted and universally practiced Standard Setting Bodies - correct answers.Financial Accounting Standards Board (FASB) (SEC) International Accounting Standards Board (IASB) Historical Cost Principle - correct tes that companies record assets at their cost. Fair Value Principle - correct s that assets and liabilities should be reported at a fair value Monetary Unit Assumption - correct nies include in accounting records only transaction data expressed in money. Economic Entity Assumption - correct answers.Requires that activities of the entity be kept separate and distinct from activities of the owner Combining activities of Kellogg and General Mills would violate? - correct answers.Economic Entity Assumption Corporation - correct answers.Ownership divided into shares of stock Accounting Equation - correct answers.Assets= Liabilities + Stockholder's Equity Assets - correct answers.Resources a business owns Provide future service or benefits Cash, Supplies, Equipment Liabilities - correct answers.Claims against assets (Debts and Obligations) Creditors- Party to whom money is owed Accounts Payable, Notes Payable Stockholder's Equity - correct answers.Ownership claim on total Assets Referred to as residual Equity Common Stock and Retained Earnings Dividends - correct ibution of cash or other assets to stockholders. They reduce retained earnings but are not an expense. Expense - correct the cost of assets consumed or services used in the process of earning revenue. Transactions - correct answers.Economic events recorded by accountants Income Statement - correct answers.Reports Profitability of the company List Revenues first, followed by expenses Shows net income or net loss Retained Earnings statement - correct answers.Reports changes in retained earnings for same period as income statement Balance Sheet - correct answers.Reports the assets, liabilities, and stockholders' equity at a specific date. Is a snapshot of the company's financial condition at a specific moment in time Statement or Cashflows - correct answers.Where did the cash come from What was it used for What was the change in balance The Account - correct answers.Record of increases and decreases in a specific asset, liability, equity, revenue, or expense Double Entry System - correct answers.Debit one account, credit the other Debits must equal Credits Debits Credits - correct answers.Account will have a debit balance CreditsDebits - correct answers.Account will have a credit balance Recording Assets - correct answers.Debits should exceed credits Recording Liablities - correct answers.Credits should exceed debits Normal balance is - correct the increase side Owner's investments and revenues - correct answers.Increase stock holders equity (Credit) Dividends and Expenses - correct ase stock holders equity (Debit) Expenses Decrease - correct holders equity Debits - correct answers.Increase assets and decrease liabilites Accounts that normally have debit balances are - correct answers.Assets, dividends, and expenses The Journal - correct answers.Shows complete effects of transaction Chronological Order