SI Session 9/29/12
Acct 284
Chapter 1
Business Decisions and Financial Accounting
1. What are the two types of accounting systems?
2. Who are decision makers for each of these two accounting systems?
3. What are the four financial statements provided by the financial accounting system?
1.
2.
3.
4.
4. What are the four accounting equations used on each of the financial statements above?
1.
2.
3.
4.
5. What is an asset? List 4 different assets that will be seen on a balance sheet.
6. Net income can be found in the equation of what two financial statements?
8. What are the two pieces of stockholder’s equity?
9. What are the three separate sections on the statement of cash flows?
10. What financial statement reports financials at a point in time?
11. Which financial statements report for an accounting period as opposed to at a point in time?
12. What does GAAP stand for?
14. What are four qualitative characteristics of accounting information?
1.
2.
3.
4.
15. Who is responsible for the information provided in the financial statements?
16. What was passed in 2002 in response to the accounting fraud involving Enron, WorldCom, Global Crossing, and Xerox?
17. What are the 3 types of business entities?
1.
2.
3.
18. What is a major disadvantage of a corporation?
19. What is a major advantage of a corporation?
20. Matching (M 1-2 from book)
___ 1. SEC
___ 2. Investing Activities
___ 3. Private Company
___ 4. Corporation
___ 5. Accounting
___ 6. Partnership
___ 7. FASB
___ 8. Financing activities
___ 9. Unit of measure
___ 10. GAAP
___ 11. Public company
___ 12. Operating Activities
A. a system that collects and processes financial information about an organization and reports that information to decision makers.
B. Measurement of information about a business in the monetary unit
C. An unincorporated business owned by two or more persons
D. A company that sells shares of its stock privately and is not required to release its financial statements to the public
E. An incorporated business that issues shares of stock as evidence of ownership
F. Buying and selling productive resources with long lives
G. Transactions with lenders and stockholders
H. Activities directly related to running the business to earn profit
I. Securities and Exchange Commission
J. Financial Accountings Standards Board
K. A company that has its stock bought and sold by investors on established stock exchanges
L. Generally accepted accounting principles
8. Match the following words with the word that best fits each description.
a. Relevance b. Reliability
c. Comparability d. Consistency
e. Sole proprietorship f. Partnership
g. Corporation h. assets
i. liabilities j. stockholder’s equity
k. revenues l. expenses
_____ The resources owned by a company.
_____ Financial information of a single company that can be compared over time
because similar accounting methods have been applied.
_____ A business with one owner; unlimited liability.
_____ The total amounts invested and reinvested in the business by the owners.
_____ The costs of business necessary to earn revenue.
_____ A feature of financial information that allows it to influence a decision.
_____ A business in which two or more people take ownership; unlimited liability.
_____ Earned by selling goods or services to customers (purpose of business)
_____ The amounts owed by the owners/company.
_____ Financial information that is unbiased and verifiable.
_____ A business with limited liability; protects personal assets of owners.
_____ Financial information that can be compared across businesses because similar
accounting methods have been applied.
Exercise E1-3 Book
DSW is a designer shoe warehouse, selling some of the most luxurious and fashionable shoes at prices that people can actually afford. Its year-end balance sheet, at January 28, 2006, contained the following items (in thousands).
Accounts Payable: $85,820 Other liabilities: $53769
Accounts Receivable: $4,088 Property Plant & Equipment: $95921
Cash: $124,759 Retained Earnings: $26,007
Contributed Capital: $278,709 Total Assets: ?
Notes Payable: $63410 Total Stockholders Equity: ?
Other Assets: $282947
1. Prepare the Balance Sheet Solving for the missing amounts