FA Chapter 1

The primary objective of financial reporting is to provide information

Which type of business organization provides the least amount of protection for bankers and other creditors of the company?

Assets are usually reported at their:

During March, assets increased by $19.000 and liabilities increased by $6000. Shareholders' equity must have:

The amount a company expects to collect from customers appears on the

All of the following are current assets except

Revenues are

The financial statement that reports revenues and expenses is called the

Another name for the balance sheet is the

Rainbow Corporation began the year with cash of $32,000 and other assets that totalled
$22,000. During the year Rainbow earned sales revenue of $133,000 and had the following expenses:
salaries: $56,000; rent: $10,000; and utilities: $5,000. At year-end Rainbow’s cash balance

Advanced Instruments had retained earnings of $150,000 at December 31, 20X5. Net
income for 20X6 totaled $120,000, and dividends for 20X6 were $20,000. How much retained
earnings should Advanced Instruments report at December 31, 20X6?

Which of the following is not an enhancing qualitative characteristic?

. Cash paid to purchase a building appears on the statement of cash flows among the

The shareholders’ equity of Diakovsky Company at the beginning and end of 20X6
totaled $16,000 and $21,000, respectively. Assets at the beginning of 20X6 were $25,000. If
Diakovsky Company’s liabilities increased by $8,000 in 20X6, how much were total assets at
the end of 20X6? Use the accounting equation.