accounting1

Which of the following is an external user of accounting information?

• Labor unions.

• Finance directors.

• Company officers.

• Managers.

Financial accounting provides economic and financial information for each of the following except

• creditors.

• investors.

• managers.

• other external users.

The historical cost principle requires that companies record assets at their

• appraisal value.

• cost.

• market price.

• list price.

IFRS are determined by the

• Internal Accounting Standards Body.

• International Accounting Studies Board.

• International Accounting Standards Board.

• International Auditors' Standards Body.

Harrod's Inc. purchased land for ₤50,000 in 2007. At December 31, 2017, an appraisal determined the fair value of the land is ₤65,000. If Harrod's follows the historical cost principle, in the 2017 financial statements, the land will be reported at

• ₤50,000 on the statement of financial position.

• ₤65,000 on the statement of financial position.

• ₤50,000 on the income statement.

• ₤65,000 on the income statement.

The economic entity assumption requires that the activities

• of different entities can be combined if all the entities are corporations.

• must be reported to the Securities and Exchange Commission.

• of a sole proprietorship cannot be distinguished from the personal economic events of its owners.

• of an entity be kept separate from the activities of its owner.

John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a

• joint venture.

• partnership.

• corporation.

• proprietorship.

The assumption that enables accounting to quantify (measure) economic events is the

• economic entity assumption.

• cost principle.

• historical cost principle.

• monetary unit assumption.

Equity is best depicted by the following:

• Assets = Liabilities.

• Liabilities + Assets.

• Residual equity + Assets.

• Assets – Liabilities.

The basic accounting equation cannot be restated as

• Assets – Liabilities = Equity.

• Assets – Equity = Liabilities.

• Equity + Liabilities = Assets.

• Assets + Liabilities = Equity.