What is the purpose of accounting in society?

Technology is increasingly used to process accounting data. Why then must we study and understand accounting?

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379573/wiL79573_Chesspiece1_22.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a> Identify four kinds of external users and describe how they use accounting information.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379573/wiL79573_Chesspiece1_22.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a> What are at least three questions business owners and managers might be able to answer by looking at accounting information?

Identify three actual businesses that offer services and three actual businesses that offer products.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379573/wiL79573_Chesspiece1_22.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a> Describe the internal role of accounting for organizations.

Identify three types of services typically offered by accounting professionals.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379573/wiL79573_Chesspiece1_22.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a> What type of accounting information might be useful to the marketing managers of a business?

Why is accounting described as a service activity?

What are some accounting-related professions?

How do ethics rules affect auditors' choice of clients?

What work do tax accounting professionals perform in addition to preparing tax returns?

What does the concept of objectivity imply for information reported in financial statements? Why?

A business reports its own office stationery on the balance sheet at its $400 cost, although it cannot be sold for more than $10 as scrap paper. Which accounting principle and/or assumption justifies this treatment?

Why is the revenue recognition principle needed? What does it demand?

Describe the three basic forms of business organization and their key characteristics.

Define (a) assets, (b) liabilities, (c) equity, and (d) net assets.

What events or transactions change equity?

Identify the two main categories of accounting principles.

What do accountants mean by the term revenue?

Define net income and explain its computation.

Identify the four basic financial statements of a business.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379573/wiL79573_Chesspiece1_22.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a>What information is reported in an income statement?

Give two examples of expenses a business might incur.

What is the purpose of the statement of retained earnings?

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379573/wiL79573_Chesspiece1_22.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a> What information is reported in a balance sheet?

The statement of cash flows reports on what major activities?

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379573/wiL79573_Chesspiece1_22.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a> Define and explain return on assets.

^A Define return and risk. Discuss the trade-off between them.

^BDescribe the three major business activities in organizations.

^BExplain why investing (assets) and financing (liabilities and equity) totals are always equal.

Refer to the financial statements of Best Buy in Appendix A near the end of the book. To what level of significance are dollar amounts rounded? What time period does its income statement cover?

Refer to Circuit City's balance sheet in Appendix A near the end of the book. Confirm that its total assets equal its total liabilities plus total equity.

Identify the dollar amounts of Radio-Shack's 2006 assets, liabilities, and equity as reported in its statements in Appendix A near the end of the book.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073379573/wiL79573_Chesspiece1_22.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a> Access the SEC EDGAR database (www.SEC.gov) and retrieve Apple's 2006 10-K (filed 12-29-2006). Identify its auditor. What responsibility does its independent auditor claim regarding Apple's financial statements?