Financial Accounting examples - Correct Answer credit
analysis, regulatory uses (such as financial health of bank and
insurance companies), estimate the value of a company
financial statements - Correct Answer The general-purpose
information provided by financial accounting - the balance sheet,
income statement, and statement of cash flows
balance sheet - Correct Answer document that reports the
resources of a company (the assets), the company's obligations
(the liabilities), and the owners' equity, which represents how
much money has been invested in the company by its owners
Income Statement Equation - Correct Answer Revenues -
Expenses = Net Income
income statement - Correct Answer document that reports the
amount of net income earned by a company during a period, with
annual and quarterly income statements being the most common
,statement of cash flows - Correct Answer document that reports
the amount of cash collected and paid out by a company in the
following three types of activities: operating, investing, and
financing
outflows of cash (payments) - Correct Answer operating
activities (paying wages, utilities, taxes), investing activities
(purchasing buildings, purchasing land), financing activities
(repaying loans, distribution to owners)
key external financial accounting data users - Correct Answer
lenders and investors
key internal users of financial accounting data - Correct Answer
management
other external users of financial information - Correct Answer
suppliers, customers, employees, competitors, government
agencies, politicians, the press
The emphasis in financial accounting is on which of the following
external user groups? - Correct Answer investors and creditors
The primary internal group that uses accounting information is -
Correct Answer management
, Internal reports are generally used by - Correct Answer
management
Which of the following is NOT an external user of financial
information? - Correct Answer management
Accounting Standards also means... - Correct Answer
accounting rules
compensation expense examples - Correct Answer cash salary,
new car for employee, and potentially options (10% owner after
one year in exchange for an investment after x amount of years)
Financial Accounting Standards Board (FASB) - Correct Answer
the private board group (7 members) that establishes the
generally accepted accounting principles used in the practice of
financial accounting. (not a government agency, people
experienced in business and accounting, public process)
Generally Accepted Accounting Principles (GAAP) - Correct
Answer a set of accounting standards that is used in the
preparation of financial statements (no legal authority)
why do we need accounting rules? - Correct Answer for
comparability
Which of the following is NOT true of the Financial Accounting
Standards Board (FASB)? - Correct Answer It is a government
agency
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