Self study Questions: ch. 1

  1. This course of study is most commonly similar to financial accounting
    Foreign language
  2. Financial accounting serves these primary functions: _________________ and ________________.
    measures business activity and communicates business activities to interested parties
  3. The resources of a company are referred to as:
  4. Amounts earned from sales of products or services are referred to as:
  5. Which financial statement conveys a company's ability to generate profit in the current period?
    Income statement
  6. Which financial statement shows that a company's resources equal claims to those resources?
    Balance sheet
  7. Why does financial accounting have a positive impact on our society?
    Allows investors and creditors to direct their assets to successful companies and away from unsuccessful ones
  8. Name the body of rules and procedures that guide the measurement and communication of financial accounting information:
    Generally Accepted Accounting Principals (GAAP)
  9. Benefits to a career in accounting
    • high salaries
    • wide range of job opportunities
    • high demand for accounting graduates
  10. What are the two fundamental qualitative characteristics identified by the Financial Accounting Standards Board's (FASB) conceptual framework
    relevance and faithful representaion
  11. This type of transaction is a transaction the firm conducts with a separate economic entity
    external transaction
  12. Give the steps included in the process of measuring external transactions
    • 1. Gather information about a transaction using source documents as an aid
    • 2.
  13. Issuing common stock in exchange for cash will cause an increase what?
    total assets
  14. Providing services to a customer on account will cause an increase in what?
    stockholders equity
Card Set
Self study Questions: ch. 1
ACCT 2401: Principals of Accounting 1 Financial Accounting test 1 self study questions for chap 1