ACCT II REVIEW GUIDE – 1.01-1.02 GAAP & AICPA Code of Ethics

Stan Stanley, a stockholder of Hubble Corporation, has just received a set of financials. Although he took Accounting 1 in high school, he really did not pay much attention to his studies. While looking at these financials, he sees the words Net Income, Dividends Paid, and Stocks Issued on a sheet. What financial statement is Stan viewing?

• Balance Sheet
• Income Statement
• Statement of Cash Flow
• Statement of Stockholders Equity

Stan Stanley, a stockholder of Hubble Corporation, has just received a set of financials. Although he took Accounting 1 in high school, he really did not pay much attention to his studies. While looking at these financials, he sees the words Operating Activities, Investing Activities, and Financing Activities on a sheet. Which financial statement is Stan viewing?

• Balance Sheet
• Income Statement
• Statement of Cash Flow
• Statement of Stockholders Equity

Stan Stanley, a stockholder of Hubble Corporation, has just received a set of financials. Although he took Accounting 1 in high school, he really did not pay much attention to his studies. While looking at these financials, he sees the words Assets, Liabilities, and Stockholders Equity on a sheet. Which financial statement is Stan viewing?

• Balance Sheet
• Income Statement
• Statement of Cash Flow
• Statement of Stockholders Equity

Susan Sorry has just started her company. She sells sea shells by the sea shore. Since this is her first year of operations, she wants to show as large of a profit as she can to impress her stockholders. When she is preparing her year-end financials, Susan decides to wait and list some expenses of her business until next year, when her profit will be higher. Which principle keeps Susan from inadequately accounting for these costs?

• Cost Principle
• Full Disclosure Principle
• Revenue Recognition Principle
• Matching Principle

Harley's Hog BBQ owns and operates several Barbecue Restaurants. In 2004, Harley, the owner, took out a loan for his business in the amount of $100,000. The loan will be completely paid off within 6 months. When preparing the financial statements of the business, Harley opted not to list the loan, since it was so close to maturity. Which principle did Harley's Hog violate?

• Cost Principle
• Full Disclosure Principle
• Revenue Recognition Principle
• Matching Principle

Shelby Sue decided to open a booth at the NC State Fair to make money to finance her Senior Beach Trip. She offered handmade items, and homemade foodstuffs for sale. When the fair was over, Shelby Sue determined she had made more than enough money for the trip. She plans to account for her money separately on her tax return; however, she is unsure about selling at the fair in the future. Which assumption should be disclosed if she were to prepare financial statements?

• Business Entity Assumption
• Going Concern Assumption
• Monetary Unit Assumption
• Time Period Assumption

Joe Blake is the president and primary stockholder of Blake Enterprises. Joe attended Harvard University and holds an MBA from Yale. He recently met with his company's CPA to ask that he be considered a long term asset on the balance sheet of his company. Which assumption did the accountants use to help Joe realize he could not be listed on the balance sheet?

• Business Entity Assumption
• Going Concern Assumption
• Monetary Unity Assumption
• Time Period Assumption

The Furniture Company prepares its financial statements four times per year. Which assumption is the Furniture Company following?

• Business Entity Assumption
• Going Concern Assumption
• Monetary Unit Assumption
• Time Period Assumption

Joe Blake is the president and primary stockholder of Blake Enterprises. He just found out that his major supplier has filed bankruptcy. Joe is worried because he cannot purchase his inventory from any other supplier. When preparing the company's financial statements, Joe withholds this information from the accountants. Which of the following assumptions is he violating?

• Business Entity Assumption
• Going Concern Assumption
• Monetary Unit Assumption
• Time Period Assumption

The Jonas Music Store received inventory for the new school year from a company in Great Britain. The invoice was stated in terms of British pounds. The accountant is unsure how to account for this transaction.

• Measurement Concept
• Recognition Concept
• Reality Concept
• Materiality Concept