What is a Dividend?
A distribution by a corporation to its customers.
A distribution by a corporation to its owners.
A distribution by a corporation to its stockholders.
Define financial accounting.
The field of accounting that provides economic and financial information for investors, creditors and other external users.
The field of accounting that provides economic and financial information for owners, customers and other external users.
The field of accounting that provides economic and financial information for the government, the general public and other external users.
What is an income statement?
A financial statement that presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time.
A financial statement that presents the dividends and common stock and resulting net income or net loss of a company for a specific period of time.
A financial statement that presents the cash and dividends and resulting net income or net loss of a company for a specific period of time.
Define Ethics.
The standards of business by which one's actions are judged as right or wrong, honest or dishonest, fair or not fair.
The process by which a company is investigated by the federal reserve for suspicion of money laundering.
The standards of conduct by which one's actions are judged as right or wrong, honest or dishonest, fair or not fair.
What is a compound entry?
A journal entry that involves one or two accounts.
A general ledger account that is compounded on a monthly basis.
A journal entry that involves three or more accounts.
What is a chart of accounts?
A list of accounts and the definitions of those accounts.
A list of accounts and the account numbers that identify their location in the ledger.
A list of accounts displayed on a chart or graph.
Define a Journal.
An accounting record in which sales are initially recorded in chronological order.
An accounting record in which transactions are initially recorded in chronological order.
An accounting record in which revenues are initially recorded in chronological order.
Define Ledger.
The entire group of journals maintained by a company.
The entire group of accounts maintained by a company.
A sample of accounts maintained by a company.
What are retained earnings?
Net income that is kept (retained) in the business.
Net income that is converted into cash.
Net income that is kept (retained) in the business and distributed to the shareholders.
What is Depreciation?
The allocation of the cost of a liability to expense over its useful life in a rational and systematic manner.
The allocation of the cost of land to expense over its useful life in a rational and systematic manner.
The allocation of the cost of an asset to expense over its useful life in a rational and systematic manner.
Define fiscal year.
An accounting period that is one year in length.
An accounting period that is one month in length.
An accounting period that is six months in length.
What are Interim Periods?
Daily or Monthly accounting time periods.
Semi-annually or anual accounting time periods.
Monthly or quarterly accounting time periods.
Define accrual-basis accounting.
Accounting basis in which companies record transactions that change a company's journal entries in the periods in which the events occur.
Accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur.
Accounting basis in which companies record transactions that change a company's net income/loss in the periods in which the events occur.
What are accrued expenses?
Expenses incurred but not yet paid in cash or recorded.
Expenses that are paid for but not yet recorded.
Expenses incurred that are paid for and recorded.
Accrued revenues?
Revenues for services performed not yet received in cash but have been recorded.
Revenues for services not yet performed but have received cash and recorded.
Revenues for services performed not yet received in cash or recorded.
What are unearned revenues?
Cash received before services are performed.
Cash not yet received before services are performed.
Cash not yet received but services have been performed.
Define Book Value.
The difference between the sale of a depreciable asset and its related accumulated depreciation.
The difference between the cost of a depreciable asset and its related accumulated depreciation.
The difference between the cost of a depreciable liability and its related accumulated depreciation.
What are prepaid expenses?
Expenses paid in cash before they are used or consumed.
Expenses paid in cash after they are used or consumed.
Expenses paid on credit before they are used or consumed.
What is a Classified Balance Sheet?
An income statement that contains standard classifications or sections.
A balance sheet that contains standard classifications or sections.
A trial balance sheet that contains standard classifications or sections.
Define Current Assets.
Assets that a company expects to convert to cash or use up within one year.
Assets that a company expects to convert to cash or use up within 3 years.
Assets that a company expects to convert to cash or use up within 5 years.
What are Closing Entries?
Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholder's expense account, Retained Earnings.
Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholder's equity account, Common Stock.
Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholder's equity account, Retained Earnings.
What are Intangible Assets?
Non-current assets that do not have physical substance.
Non-current assets that have physical substance.
Non-current liabilities that do not have physical substance.
Define Income Summary.
A temporary account used in closing cash and expense accounts.
A temporary account used in closing revenue and expense accounts.
A temporary account used in closing revenue and dividend accounts.
Define Liquidity.
The ability of a company to pay obligations expected to be due within the next month.
The ability of a company to pay obligations expected to be due within the next year.
The ability of a company to pay obligations expected to be due within the next 3 years.
What is a worksheet?
A multiple-column form that may be used in making adjusting entries and in preparing and income statement.
A multiple-column form that may be used in making closing entries and in preparing financial statements.
A multiple-column form that may be used in making adjusting entries and in preparing financial statements.
What is the operating cycle?
The average time that it takes to purchase common stock, sell it on account , and then collect cash from shareholders.
The average time that it takes to purchase inventory, sell it on account , and then collect cash from customers.
The average time that it takes to purchase inventory and then sell it for cash.
What are long-term investments?
Generally, (1) investments in stocks and bonds of other companies that companies normally hold for many years, and (2) long-term assets, such as land and buildings, not currently being used in operations.
Generally, (1) investments in stocks and bonds of other companies that companies normally hold for many years, and (2) short-term assets, such as inventory, not currently being used in operations.
Generally, (1) investments in short sale stock and mutual funds of other companies that companies normally hold for a few days, and (2) long-term assets, such as land and buildings, currently being used in operations.
Define Stockholder's Equity.
The combination of revenue and dividend accounts. Often referred to as the ownership claim of shareholders on total assets. It is to a corporation what owner's equity is to a proprietorship.
The combination of asset and liability accounts. Often referred to as the ownership claim of shareholders on total assets. It is to a corporation what owner's equity is to a proprietorship.
The combination of common stock and retained earnings accounts. Often referred to as the ownership claim of shareholders on total assets. It is to a corporation what owner's equity is to a proprietorship.
What are Temporary (nominal) accounts?
Accounts that relate only to a given accounting period. Consist of all income statement accounts and the dividends account. All temporary accounts are closed at the end of the accounting period.
Accounts that relate only to any given accounting period. Consist of all income statement accounts and the dividends account. All temporary accounts are closed at the end of the accounting period.
Accounts that relate only to a given accounting period. Consist of all liability accounts and the dividends account. All temporary accounts are closed at the end of the accounting period.
What is a Reversing Entry?
An entry, made at the beginning of the next accounting period, that is the exact opposite of the adjusting entry made in the previous period.
An entry, made at the ending of the next accounting period, that is the exact opposite of the adjusting entry made in the previous period.
An entry, made at the beginning of the next accounting period, that is exactly the same as the adjusting entry made in the previous period.
What is a Post-Closing Trial Balance?
A list of permanent accounts and their balances before a company has journalized and posted closing entries.
A list of temporary accounts and their balances after a company has journalized and posted closing entries.
A list of permanent accounts and their balances after a company has journalized and posted closing entries.
What are permanent (real) accounts?
Accounts that do not relate to one or more accounting periods. Consist of all income statement accounts. Balances are carried forward to the next accounting period.
Accounts that relate to one or more accounting periods. Consist of all balance sheet accounts. Balances are carried forward to the next accounting period.
Accounts that relate to one or more accounting periods. Consist of all balance sheet accounts. Balances are closed before the start of the next accounting period.
