What of the Following Is Not Consistent with the Primary Purpose of Financial Accounting?

What of the Following Is Not Consistent with the Primary Purpose of Financial Accounting?

  1. What of the following is not consistent with the primary purpose of financial accounting?
  2. To provide the SEC audited financial statements on a quarterly and annual basis.
  3. To provide investors with relevant information to use in decision making.
  4. To provide financial institutions with information relevant to lending decisions.
  5. All of the above are consistent with the purpose of financial accounting.
  1. What are the 4 financial Statement equations?
  1. Primary responsibility for the information in a corporation's financial statements rests with
  2. the shareholders of the corporation.
  3. the managers of the corporation.
  4. the Securities and Exchange Commission.
  5. the certified public accountant who audited the financial statements.
  1. Which of the following best describes the objective of financial accounting?
  2. To capture information about the activities of a company so that it can be reported to decision makers inside the business.
  3. To capture information about the activities of a company so that it can be reported to decision makers outside the business.
  4. To capture information about employee activities of a company so that it can be reported to managers.
  5. To capture information about investors, so a company can decide who to sell stock to.
  6. Define 4 principles. (Cost Principle, Time Period Assumption, Revenue Recognition Principle, and Matching Principle)

Cost Principle: Assets are recorded at their COST (not their market value /

fair value)

Time Period Assumption: the long life of a company can be reported in shorter time periods

Revenue Recognition Principle: Revenues are recognized when

EARNED, regardless of when cash is received

Matching Principle: Expenses should be recognized in the period in

which it was used to generate revenue (i.e., MATCHED to the same time

period as the revenue)

 In other words, we should recognize expenses when they happen,

not when the cash is paid

  1. On October 1, 2010, Jenson CO. paid $75,000 for its rent for the five months from October 2010 through February 2011. The entire amount of the payment was recorded in the Prepaid Rent account. No adjustments have been recorded relating to this account. If the company makes an adjustment as of December 31, 2010, what amount should be included in the related adjusting journal entry?
  2. $30,000
  3. $45,000
  4. $60,000
  5. $75,000
  1. The records of Greene Enterprises include the following as of June 1, 2010. The Property and Equipment has a balance of $600,000 and the Accumulated Depreciation account has a balance of $133,000. Depreciation for the month of June 2010 has been estimated at $12,500. What will the balance in the Accumulated Depreciation account be after the related adjustment is recorded on June 30, 2010?
  2. $120,500
  3. $145,500
  4. $587,500
  5. $612,500
  1. What is the Multistep Income Statement Formula?

Sales – COGS = Gross Profit – Operating Expenses = Operating Income

+/- Other Income and Expenses = Income Before Tax – Tax Expense = Net

Income

  1. Net Sales were 10,000. Income from operations was equal to 3,000 and operating expenses were 1,500. What was COGS?
  2. 6000
  3. 10,500
  4. 5,500
  5. 4500
  6. What is the reconciled amount?

Bank StatementBook Cash Account

End Balance25,000Balance26,200

NSF800Deposit in Transit900

Service Charge25Check Outstanding200

Interest250

Electronic Deposit75

25,000-200+900=25,70026,200-800-25+250+75=25,700

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