An error occurred while updating the entries entity framework Free chat room for dirty fun
The economic entity assumption requires that the activities of an entity be kept separate and distinct from the activities of its owner and all other economic entities. The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records. In order to possess future service potential, an asset must have physical substance. Owners’ claims to total business assets take precedence over the claims of creditors because owners invest assets in the business and are liable for losses. The basic accounting equation states that Assets = Liabilities. Accountantsrecord both internal and external transactions. Answers to True-False Statements 1 – 7 MULTIPLECHOICE QUESTIONS 41.
Internal transactions do not affect the basic accounting equation because they are economic events that occur entirely within one company. The purchase of store equipment for cash reduces the owner’s equity by an equal amount. The purchase of office equipment on credit increases total assets and total liabilities. The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments of a company during a period. Net income for the period is determined by subtracting total expenses and drawings from total revenues. Identifying is the process of keeping a chronological diary of events measured in dollars and cents. Management consulting includes examining the financial statements of companies and expressing an opinion as to the fairness of their presentation. Accountantsdo not have to worry about issues of ethics. At the time an asset is acquired, cost and value should be the same. The monetary unit assumption requires that all dollar amounts be rounded to the nearest dollar. The basic accounting equation is in balance when the creditor and ownership claims against the business equal the assets. External transactions involve economic events between the company and some other enterprise or party. In the owner’s equity statement, revenues are listed first, followed by expenses, and net income (or net loss).
Which list below best describes the major services performed by public accountants?
Preparing tax returns and engaging in tax planning is performed by a.
does not use the same principles as manual accounting systems. has greatly impacted the identification stage of the accounting process.
The final step in solving an ethical dilemma is to a.
The origins of accounting are generally attributed to the work of a.
Financial accounting provides economic and financial information for all of the following except a.
recognize an ethical situation and the ethical issues involved. weigh the impact of each alternative on various stakeholders. Ethics are the standards of conduct by which one’s actions are judged as a.
income tax regulations of the Internal Revenue Service. standards that indicate how to report economic events. theories that are based on physical laws of the universe. principles that have been proven correct by academic researchers. The cost principle requires that when assets are acquired, they be recorded at a.
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The cost of an asset and its fair market value are a.