Financial Accounting
Essay by Kapik Leung • March 29, 2018 • Course Note • 517 Words (3 Pages) • 902 Views
Page 1 of 3
Study Guide Exercise Answers (Chapter 1&2)
Accounting: Information for Decision Making & Basic Financial Statement
TRUE-FALSE QUESTIONS
- False - Management accounting is to assist management in operating the business.
- True
- False - They are different financial statements.
- False - It is not one of the primary financial statements.
- True
- False - A profit results from having more revenues than expenses.
- False - Total assets always equal total liabilities plus total equity.
- True
FILL IN THE BLANKS
- The primary financial statements for external financial reporting are (i) Income Statement, (ii) Statement of Financial Position and (iii) Statement of Cash Flows.
- The statement of cash flows provides information about how a company receives its cash and where it spends its cash during a period of time.
- Financial Accounting provides information about the financial resources, obligations and activities of an enterprise that is intended for use primarily by investors and creditors.
- The competent accountants have to prepare and present the accounting information properly by using their professional judgment and applying strong ethical standards.
- The professional accountants have to consider whether there is adequate disclosure to provide facts necessary for the proper interpretation of the statements.
- A company has assets total $450,000, liabilities total $120,000, and share capital totals $200,000, the amount of retained earnings is $130,000.
- A company purchased tools by cash, Tools will increase and Cash will decrease.
- A company purchased office supplies on credit, Office Supplies and Accounts Payable will increase.
- A company purchased office equipment by issuing a short-term note payable, Office equipment and Notes Payable will increase.
- A company sold 10,000 shares of its common stock for a total of $45,000 cash, Cash and Share Capital will increase.
MATCHING
Classification of ‘Statement of Financial Position’ Items | ||||
[pic 2] | ∙ | Cash | ||
[pic 3] | ∙ | Retained earnings | ||
[pic 4] | ∙ | Investment in other company | ||
Asset ∙[pic 5][pic 6][pic 7][pic 8][pic 9] | ∙ | Plant and equipment | ||
[pic 10] | ∙ | Accounts payable | ||
∙ | Accounts receivable | |||
Liability ∙[pic 11][pic 12] | ∙ | Land | ||
∙ | Salaries Payable | |||
∙ | Inventories | |||
Equity ∙[pic 13] | ∙ | Notes payable | ||
∙ | Notes Receivable | |||
∙ | Share capital | |||
SHORT QUESTION
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