Ferg Acctg Bellringer 12 Financial

A balance sheet compares liabilities and equity to which of the following?

• Assets

• Salaries

• Debt

• Revenue

Your plumbing company fixed the shower for Jane Smith. You have invoiced Jane for $1,000 but she has not paid yet. Using the cash method of accounting, how much should you show as income?

• $0

• $1,000

• $1,000 plus a late fee

• $500

Why might potential investors and creditors look at a company's financial statements?

• To see if they would like to enter into a financial relationship with the company

• To see how much they have gained or lost in the company

• To see how many employees the company has

• To see if any of their money has been retained by the company

Which financial statement shows how much money that a company made was retained and reinvested in the company?

• Statement of Retained Earnings

• Balance Sheet

• Income Statement

• Statement of Cash Flows

Identify the person that reviews the audit report of a company to see if the company is being compliant with the law?

• Regulator

• Auditor

• Adjustor

• Examiner

When a criminal case is tried, the stenographer writes down every word of the proceeding. How does the principle of monetary management differ?

• Every single accounting action recorded deals with money.

• Depreciation of assets should be kept as a separate log.

• Any transaction should recorded for IRS audit purposes.

• Only transactions where money is paid out are recorded.

Which of the following is the equation used for the basic income statement?

• Revenue - Expenses = Net Income or Net Loss

• Expenses + Revenue = Net Income or Net Loss

• Revenue / Expenses = Net Income or Net Loss

• Revenue + Expenses = Net Income or Net Loss

What is the section of the statement of cash flows that includes activities that occur during the normal day-to-day operations of a company?

• Operating

• Equity

• Assets

• Financing

The balance sheet is a part of which of the following?

• Financial Statements

• Income Statement

• Statement of Cash Flows

• Statement of Retained Earnings

What is a liability that has not yet occurred but the conditions are favorable that it will occur called?

• Contingent liability

• Unrecognized event

• Recognized liability

• Subsequent event liability