Generally Accepted Accounting Principles play an important role in financial reporting. a. What is meant by the phrase generally accepted accounting principles? b. What are the major sources of these principles? c. Is there a single comprehensive list of generally accepted accounting principles? Explain. d. What types of accounting reports are prepared in conformity with generally accepted accounting principles?
> Jiminez, Inc., had the following transactions during the month of March, current year. Prepare an income statement based on this information, being careful to include only those items that should appear in that financial statement. 1. Cash received from
> During the month of October, current year, Weller Company had the following transactions. 1. Revenues of $14,400 were earned and received in cash. 2. Bank loans of $3,600 were paid off. 3. Equipment of $3,000 was purchased for cash. 4. Expenses of $9
> Professional judgment plays a major role in the practice of accounting. a. In general terms, explain why judgment enters into the accounting process. b. Identify at least three situations in which accountants must rely on their professional judgment, ra
> Explain whether each of the following balance sheet items increases, reduces, or has no direct effect on a company’s ability to pay its obligations as they come due. Explain your reasoning. a. Cash. b. Accounts Payable. c. Accounts Receivable. d. Capi
> Give an example of business transactions that would: a. Cause one asset to increase and another asset to decrease, with no effect on either liabilities or owners’ equity. b. Cause both total assets and liabilities to increase with no effect on owners’
> Can a business transaction cause one asset to increase without affecting any other asset, liability, or owners’ equity?
> Why is the going-concern assumption an important consideration in understanding financial statements?
> Why is the statement of financial position, or balance sheet, a logical place to begin a discussion of financial statements?
> The following list of balance sheet items are in random order for Alexander Farms, Inc., at September 30, current year. Instructions: a. Prepare a balance sheet by using these items and computing the amount for Retained Earnings. Use a sequence of a
> In general terms, what are revenues and expenses? How are they related in the determination of an enterprise’s net income or net loss?
> Why is a knowledge of accounting terms and concepts useful to persons other than professional accountants?
> What are the characteristics of a strong statement of cash flows?
> What is meant by the term adequate disclosure, and how do accountants fulfill this requirement in the preparation of financial statements?
> What is meant by the statement that the financial statements articulate?
> What are the three categories commonly found in a statement of cash flows, and what is included in each category?
> Moon Corporation and Star Corporation are in the same line of business and both were recently organized, so it may be assumed that the recorded costs for assets are close to current market values. The balance sheets for the two companies are as follows a
> This assignment introduces you to EDGAR, the Securities and Exchange Commission’s database of financial information about publicly owned companies. The SEC maintains EDGAR to increase the efficiency of financial reporting in the American economy and also
> The Public Company Accounting Oversight Board (PCAOB) is a direct outcome of the Sarbanes Oxley Act of 2002. This is considered one of the most significant pieces of legislation to have ever been enacted in terms of financial reporting in several decades
> You are employed by a business consulting firm as an information systems specialist. You have just begun an assignment with a startup company and are discussing with the owner her need for an accounting system. How would you respond to the following ques
> The date is November 18, current year. You are the chief executive officer of Omega Software— a publicly owned company that is currently in financial difficulty. Omega needs new large bank loans if it is to survive. You have been negotiating with several
> John Marshall is employed as a bank loan officer for First State Bank. He is comparing two companies that have applied for loans, and he wants your help in evaluating those companies. The two companies—Morris, Inc., and Walker Company&a
> Ben Washington, sole owner of Washington Mattress Company, has an ownership interest in the company of $50,000 at January 1, current year. During that year, he invests an additional $20,000 in the company and the company reports a net income of $25,000.
> What is meant by generally accepted accounting principles, and how do these principles add to the integrity of financial accounting information?
> What is the role of the Public Company Accounting Oversight Board (PCAOB) in the audit of financial statements?
> What is meant by the professional designations CPA, CMA, and CIA, and how do these designations add to the integrity of accounting information
> Match the terms on the left with the descriptions on the right. Each description should be used only once. Torm Doscription Responsibilities a. A member in public practice should observe the Principles of The public the Code of Professional Conduct
> Match the terms on the left with the descriptions on the right. Each description should be used only once. Term Description Financlal accounting Management accounting Financial reporting c. The area of accounting that refers to providing Information
> Match the organizations on the left with the functions on the right. Each function should be used only once. Organization Function Institute of Internal Auditors a. The group that creates and promotes International Financial Reporting Standards (IFR
> List four external users of accounting information.
> Circus World is the name of a traveling circus. The ledger accounts of the business at June 30, current year are listed in alphabetical order. Instructions: a. Prepare a balance sheet by using these items and computing the amount of Cash at June 30, cu
> List three accounting-related skills that are useful to many people in their personal lives.
> Use the web to find the home page of the PCAOB. What are the four primary activities of the PCAOB?
> The FASB’s conceptual framework sets forth the Board’s views on which topics?
> What are the two primary organizations in the United States that are responsible for setting standards related to the preparation of accounting information?
> Match the terms on the left with the descriptions on the right. Each description should be used only once. Torm Description Control environment Risk assessment Control activities Information and a. Pollcles and procedures put in place by management
> A major focus of this course is the process of financial reporting. a. What is meant by the term financial reporting? b. What are the principal accounting reports involved in the financial reporting process? In general terms, what is the purpose of these
> Boeing Company is the largest manufacturer of commercial aircraft in the United States and is a major employer in Seattle, Washington. Explain why each of the following individuals or organizations would be interested in financial information about the c
> Identify several ways in which you currently use accounting information in your life as a student. Also identify several situations in which, while you are still a student, you might be required to supply financial information about yourself to others.
> Locate the Home Depot, Inc., 2015 financial statements in Appendix A of this text. Briefly peruse the financial statements and answer the following questions. a. Name the titles of each of Home Depot’s financial statements that provide specific informati
> Four accounting majors, Maria Acosta, Kenzo Nakao, Helen Martin, and Anthony Mandella, recently graduated from Central University and began professional accounting careers. Acosta entered public accounting, Nakao became a management accountant, Martin jo
> HERE COME THE CLOWNS! is the name of a traveling circus. The ledger accounts of the business at June 30, current year, are listed here in alphabetical order. Instructions: a. Prepare a balance sheet by using these items and computing the amount of Cas
> Ethical conduct and professional judgment each play important roles in the accounting process. a. In general terms, explain why it is important to society that people who prepare accounting information act in an ethical manner. b. Identify at least three
> The annual financial statements of all large, publicly owned corporations are audited. a. What is an audit of financial statements? b. Who performs audits? c. What is the purpose of an audit?
> Audits of financial statements are an important part of the accounting process to ensure integrity in financial reporting. a. What is the purpose of an audit? b. As an external user of accounting information, what meaning would you attach to an audit tha
> Describe which professional organization(s) would most likely be of greatest value to you if your position involved each of the following independent roles: a. Accounting educator. b. Management accountant. c. Certified public accountant.
> Internal accounting information is used primarily for internal decision making by an enterprise’s management. a. What are the three primary purposes of internal accounting information? b. Which of these is the most general and which is the most specific?
> The major focus of accounting information is to facilitate decision making. a. As an investor in a company, what would be your primary objective? b. As a manager of a company, what would be your primary objective? c. Is the same accounting information l
> You recently invested $18,000 of your savings in a security issued by a large company. The security agreement pays you 6 percent per year and has a maturity three years from the day you purchased it. What is the total cash flow you expect to receive from
> Describe the roles of the following organizations in establishing generally accepted accounting principles: a. FASB b. AICPA c. SEC From which of these organizations can you most easily obtain financial information about publicly owned companies?
> When you invest your savings in a company, what is the difference between the return on your investment and the return of your investment?
> The Internet is a good place to get information that is useful to you in your study of accounting. For example, you can find information about accounting firms, standard setters, and regulators. Instructions: a. The largest U.S. accounting firms are ref
> Accounting is sometimes described as the language of business. What is meant by this description?
> What is the definition of internal control, and what are the five components of COSO’s internal control framework?
> Is internal accounting information primarily historical or future-oriented? How does that compare with financial accounting information?
> Is externally reported financial information always precise and accurate?
> What is the International Accounting Standards Board (IASB), and what are its objectives?
> What are the three primary financial statements with which we communicate financial accounting information?
> What is the Securities and Exchange Commission (SEC), and what is its role in external financial reporting?
> What is the Financial Accounting Standards Board (FASB), and what is its role in external financial reporting?
> Why was the Sarbanes-Oxley legislation passed in 2002, and what are its implications for the accounting profession?
> Star Scripts is a service-type enterprise in the entertainment field, and its manager, Joe Smartt, has only a limited knowledge of accounting. Joe prepared the following balance sheet, which although arranged satisfactorily, contains certain errors with
> The items making up the balance sheet of Maxx Trucking at December 31 are listed here in tabular form similar to the illustration of the accounting equation in Chapter 2 of the text During a short period after December 31, Maxx Trucking had the followi
> Big Screen Scripts is a service-type enterprise in the entertainment field, and its manager, William Pippin, has only a limited knowledge of accounting. Pippin prepared the following balance sheet, which, although arranged satisfactorily, contains certai
> Going from general to specific, what are the three primary objectives of financial reporting?
> Howard Jaffe is the founder and manager of Old Town Playhouse. The business wishes to obtain a bank loan to finance the production of its next play. As part of the loan application, Jaffe was asked to prepare a balance sheet for the business. He prepared
> Anita Spencer is the founder and manager of Spencer Playhouse. The business needs to obtain a bank loan to finance the production of its next play. As part of the loan application, Anita Spencer was asked to prepare a balance sheet for the business. She
> What is an audit, and how does it add to the integrity of accounting information?
> The balance sheet items of The Sweet Shop (arranged in alphabetical order) were as follows at the close of the business on September 30, current year. The transactions occurring during the first week of October were as follows. Oct. 3 Additional capit
> The balance sheet items of The Soda Shop (arranged in alphabetical order) were as follows at the close of business on September 30, 2015 The transactions occurring during the first week of October were as follows. Oct. 3 Additional capital stock was so
> List three professional certifications offered in accounting and the organizations that offer them.
> Assume you have recently completed your college degree with a major in accounting and have accepted a position on the accounting staff of a large corporation. Your supervisor suggests that in preparing for your first day on the job, you become familiar w
> Delta Corporation was organized on December 1 of the current year and had the following account balances at December 31, listed in tabular form. Early in January, the following transactions were carried out by Delta Corporation. 1. Sold capital stock
> Maxwell Communications was organized on December 1 of the current year and had the following account balances at December 31, listed in tabular form. Early in January, the following transactions were carried out by Maxwell Communications. 1. Sold capi
> Why does accounting rely on inexact or approximate measures?
> Six transactions of Prosperity Company, a corporation, are summarized as follows in equation form, with each of the six transactions identified by a letter. For each of the transactions (a) through (f) write a separate statement explaining the nature of
> The balance sheet items for Collier Butcher Shop (arranged in alphabetical order) were as follows at July 1, current year. (You are to compute the missing figure for Retained Earnings.) During the next few days, the following transactions occurred. Jul
> The following six transactions of Memphis Moving Company, a corporation, are summarized in equation form, with each of the six transactions identified by a letter. For each of the transactions (a) through (f) write a separate statement explaining the nat
> Divide into groups as instructed by your professor and discuss the following: a. How does the description of accounting as the “language of business” relate to accounting as being useful for investors and creditors? b. Explain how the decisions you would
> Listed in random order are the items to be included in the balance sheet of Tri-State Lodge at December 31, year 1. Instructions: a. Prepare a balance sheet at December 31, year 1. Include a proper heading and organize your balance sheet similar to the
> Listed in random order are the items to be included in the balance sheet of Rocky Mountain Lodge at December 31, year 1 Instructions: a. Prepare a balance sheet at December 31, year 1. Include a proper heading and organize your balance sheet similar t
> In the mid-2000s, Fannie Mae was in severe financial difficulty and desperately needed additional capital for the company to survive. What factors prevented Fannie Mae from simply providing potential lenders with misleading financial statements to make t
> In broad general terms, what is the purpose of accounting?
> What are the characteristics of a strong income statement?
> What is meant by the term window dressing when referring to financial statements?
> What is meant by the terms positive cash flows and negative cash flows? How do they relate to revenues and expenses?
> What is the basic accounting equation? Briefly define the three primary elements in the equation.
> The balance sheet items for Franklin Bakery (arranged in alphabetical order) were as follows at August 1, current year. (You are to compute the missing figure for Retained Earnings.) During the next two days, the following transactions occurred. Aug. 2
> The items making up the balance sheet of Phillips Truck Rental at December 31 are listed as follows in tabular form similar to the illustration of the accounting equation in Exhibit 2–11. During a short period after December 31, Phi
> A person with a near point of 85 cm, but excellent distant vision, normally wears corrective glasses. But he loses them while traveling. Fortunately, he has his old pair as a spare. a. If the lenses of the old pair have a power of +2.25 diopters, what i
> A proton (rest mass 1.67 * 10-27 kg) has total energy that is 4.00 times its rest energy. What are a. the kinetic energy of the proton; b. the magnitude of the momentum of the proton; c. the speed of the proton?
> If a muon is traveling at 0.999c, what are its momentum and kinetic energy? (The mass of such a muon at rest in the laboratory is 207 times the electron mass.)
> Calculate the magnitude of the force required to give a 0.145-kg baseball an acceleration a = 1.00 m/s2 in the direction of the baseball’s initial velocity when this velocity has a magnitude of a. 10.0 m/s; b. 0.900c; c. 0.990c. d. Repeat parts (a),
> Three thin lenses, each with a focal length of 40.0 cm, are aligned on a common axis; adjacent lenses are separated by 52.0 cm. Find the position of the image of a small object on the axis, 80.0 cm to the left of the first lens.
> A source of electromagnetic radiation is moving in a radial direction relative to you. The frequency you measure is 1.25 times the frequency measured in the rest frame of the source. What is the speed of the source relative to you? Is the source moving t
> A convex spherical mirror with a focal length of magnitude 24.0 cm is placed 20.0 cm to the left of a plane mirror. An object 0.250 cm tall is placed midway between the surface of the plane mirror and the vertex of the spherical mirror. The spherical mir
> a. Repeat the derivation of Eq. (34.19) for the case in which the lens is totally immersed in a liquid of refractive index nliq. b. A lens is made of glass that has refractive index 1.60. In air, the lens has focal length +18.0 cm. What is the focal len
> When an object is placed at the proper distance to the left of a converging lens, the image is focused on a screen 30.0 cm to the right of the lens. A diverging lens is now placed 15.0 cm to the right of the converging lens, and it is found that the scre
> a. Prove that when two thin lenses with focal lengths f1 and f2 are placed in contact, the focal length Æ’ of the combination is given by the relationship b. A converging meniscus lens (see Fig. 34.32a) has an index of refraction of 1.55 and
> You may have noticed a small convex mirror next to your bank’s ATM. Why is this mirror convex, as opposed to flat or concave? What considerations determine its radius of curvature?
> As shown in Fig. P34.89, the candle is at the center of curvature of the concave mirror, whose focal length is 10.0 cm. The converging lens has a focal length of 32.0 cm and is 85.0 cm to the right of the candle. The candle is viewed looking through the
