Acct 2010 Final Exam Review

Front

The primary objective of financial reporting is to provide information

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about the profitability of the enterprise.

Front

Under the historical cost principle, Frost Enterprises should record the warehouse purchased for $570,000 for:

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$570,000.

Front

To be useful, information must have which of the following fundamental qualitative characteristics? Faithful representation and diversity, Timeliness and affordability, Relevance and faithful representation, Expediency and relevance

Back

Relevance and faithful representation

Front

Assume that a business is headed for certain bankruptcy and it is evident that its liabilities greatly exceed its assets. Which principle would be violated if its financial statements were prepared using standard U.S. GAAP?

Back

Continuity assumption

Front

The accounting equation can be expressed as

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Equity-Assets = Liabilities.

Front

During the year, Greenwash Corporation has $270,000 in revenues, $145,000 in expenses, and $3,000 in dividend declarations and payments. Net income for the year was:

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$128,000

Front

How would the issuance of common stock for cash affect the accounting equation?

Back

Increase assets and increase stockholders' equity

Front

The costs of doing business are classified as: revenues, assets, expenses, liabilities.

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expenses.

Front

Revenues are

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increases in retained earnings resulting from selling products or performing services.

Front

Which financial statement would show how well a company performed over the past year? Options: Balance sheet, Income statement, Statement of Retained Earnings, Statement of Cash Flows

Back

Income statement