Acc 201 CSULB midterm 1
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1. Determines whether the company complied with tax laws: Internal Revenue Service
2. Determines whether the company can pay its obligations: Creditors
3. Determines whether an advertising proposal will be cost-effective: Marketing
managers
4. Determines whether the company's net income will result in a stock price
increase: Investors in common stock
5. Determines whether company should employ debt or equity financing: Chief
financial officer
6. Which activity?
Cash received from customers: Operating
7. Which activity?
Cash paid to stockholders (dividends): Financing
8. Which activity?
Cash received from issuing new common stock: Financing
9. Which activity?
Cash paid to suppliers: operating
10. Which activity?
Cash paid to purchase a new office building: investing
11. what does the transaction effect?
costs incurred for advertising: expense
12. what does the transaction effect?
cash received for services performed: revenue
13. what does the transaction effect?
costs incurred for insurance: expense
14. what does the transaction effect?
amounts paid to employees: expense
15. what does the transaction effect?
cash distributed to stockholders: dividends
16. what does the transaction effect?
cash received in exchange for allowing the use of the company's building: revenue
17. What appears on an income statement?: Revenues - Expenses
1/6
, Acc 201 CSULB midterm 1
Study online at https://quizlet.com/_i1g1mf
18. what appears on the balance sheet?: Assets - cash, accounts receivable, supplies, equipment
etc...
liabilities and - notes payable, unearned service revenue, salaries and wages payble etc...
stockholders equity - common stock, retained earnings
19. what is on the cash flow statement?: cash flows from the 3 financing activities
20. consistency: Use of the same accounting principles and methods from year to year within a company
21. debt to assets ratio: total liabilities/total assets
22. current ratio: current assets/ current liabilities (liquidity)
23. earnings per share: the amount of net income after federal income tax belonging to a single share of
stock
net income - preferred dividends divided by total assets
24. Economic Entity Assumption: An assumption that every economic entity can be separately identified
and accounted for
25. Fair value principle: Assets and liabilities should be re- ported at fair value (the price received to sell an
asset or settle a liability)
26. full disclosure principle: Accountingprinciplethatdictates that companies disclose circumstances and
events that make a difference to financial statement users
27. Generally accepted accounting principles: A set of accounting standards that have substantia
authorita- tive support and which guide accounting professionals
28. going concern assumption: The assumption that the company will continue in operation for the
foreseeable future
29. Historical cost principle: An accounting principle that states that companies should record assets at
their cost
30. liquidity ratios: Measures of the short-term ability of the company to pay its maturing obligations and to
meet unexpected needs for cash.
31. materiality: Materiality Whether an item is large enough to likely in- fluence the decision of an investor or
creditor
32. Monetary unit assumption: assumption that requires that only those things that can be expressed in
money are included in the accounting records
2/6
Study online at https://quizlet.com/_i1g1mf
1. Determines whether the company complied with tax laws: Internal Revenue Service
2. Determines whether the company can pay its obligations: Creditors
3. Determines whether an advertising proposal will be cost-effective: Marketing
managers
4. Determines whether the company's net income will result in a stock price
increase: Investors in common stock
5. Determines whether company should employ debt or equity financing: Chief
financial officer
6. Which activity?
Cash received from customers: Operating
7. Which activity?
Cash paid to stockholders (dividends): Financing
8. Which activity?
Cash received from issuing new common stock: Financing
9. Which activity?
Cash paid to suppliers: operating
10. Which activity?
Cash paid to purchase a new office building: investing
11. what does the transaction effect?
costs incurred for advertising: expense
12. what does the transaction effect?
cash received for services performed: revenue
13. what does the transaction effect?
costs incurred for insurance: expense
14. what does the transaction effect?
amounts paid to employees: expense
15. what does the transaction effect?
cash distributed to stockholders: dividends
16. what does the transaction effect?
cash received in exchange for allowing the use of the company's building: revenue
17. What appears on an income statement?: Revenues - Expenses
1/6
, Acc 201 CSULB midterm 1
Study online at https://quizlet.com/_i1g1mf
18. what appears on the balance sheet?: Assets - cash, accounts receivable, supplies, equipment
etc...
liabilities and - notes payable, unearned service revenue, salaries and wages payble etc...
stockholders equity - common stock, retained earnings
19. what is on the cash flow statement?: cash flows from the 3 financing activities
20. consistency: Use of the same accounting principles and methods from year to year within a company
21. debt to assets ratio: total liabilities/total assets
22. current ratio: current assets/ current liabilities (liquidity)
23. earnings per share: the amount of net income after federal income tax belonging to a single share of
stock
net income - preferred dividends divided by total assets
24. Economic Entity Assumption: An assumption that every economic entity can be separately identified
and accounted for
25. Fair value principle: Assets and liabilities should be re- ported at fair value (the price received to sell an
asset or settle a liability)
26. full disclosure principle: Accountingprinciplethatdictates that companies disclose circumstances and
events that make a difference to financial statement users
27. Generally accepted accounting principles: A set of accounting standards that have substantia
authorita- tive support and which guide accounting professionals
28. going concern assumption: The assumption that the company will continue in operation for the
foreseeable future
29. Historical cost principle: An accounting principle that states that companies should record assets at
their cost
30. liquidity ratios: Measures of the short-term ability of the company to pay its maturing obligations and to
meet unexpected needs for cash.
31. materiality: Materiality Whether an item is large enough to likely in- fluence the decision of an investor or
creditor
32. Monetary unit assumption: assumption that requires that only those things that can be expressed in
money are included in the accounting records
2/6
