Why is accounting called the language of business?
What is the primary mechanism used to allocate resources in the United States?
In a business context, what does the term market mean?
What market trilogy component is involved in the process of transforming resources into finished products?
Give an example of a financial resource, a physical resource, and a labor resource.
What type of compensation does an investor expect to receive in exchange for providing financial resources to a business? What type of compensation does a creditor expect from providing financial resources to an organization or business?
How do financial and managerial accounting differ?
Describe a not-for-profit or nonprofit enterprise. What is the motivation for this type of entity?
What are the U.S. rules of accounting measurement called?
Is there a global GAAP (generally accepted accounting principles)? Explain your answer.
What body has the primary responsibility for establishing GAAP in the United States?
Distinguish between elements of financial statements and accounts.
What is the most basic form of the accounting equation?
What role do assets play in business profitability?
To whom do the assets of a business belong?
Explain the order of priority for asset distributions in a business liquidation.
Name the element used to describe the ownership interest in a business.
Name the element used to describe creditors’ claims on the assets of a business.
What is the accounting equation? Describe each of its three components.
Who ultimately bears the risk and collects the rewards associated with operating a business?
What does double-entry bookkeeping mean?
Identify the three types of accounting transactions discussed in this chapter. Provide an example of each type of transaction, and explain how it affects the accounting equation.
How does acquiring resources from owners affect the accounting equation?
Name the two primary components of stockholders’ equity.
How does earning revenue affect the accounting equation?
What are the three primary sources of assets?
What is included in retained earnings?
How does distributing assets (paying dividends) to owners affect the accounting equation?
What are the similarities and differences between dividends and expenses?
What four general-purpose financial statements do business enterprises use to communicate information to stakeholders?
Which of the general-purpose financial statements provides information about the enterprise at a specific designated date?
What causes a net loss?
What three categories of cash receipts and cash payments do businesses report on the statement of cash flows? Explain the types of cash flows reported in each category.
How are asset accounts usually arranged in the balance sheet?
What type of information does a business typically include in its annual report?
Name three types of service provided by certified public accountants.
Name three professional designations that accountants can earn.
What are the six principles of ethical conduct set out under section I of the AICPA’s Code of Professional Conduct?
