Quick Studyexercises give readers a brief test of key elements.
Homework Managerrepeats assignments on the book’s Website, which allows instructors to monitor, promote, and assess student learning. It can be used in practice, homework, or exam mode.
(a) Identify the meaning of these accounting-related acronyms: GAAP, SEC, FASB and IASB. (b) Briefly explain the importance of the knowledge base or organization that is referred to for each of the accounting-related acronyms.
An important responsibility of many accounting professionals is to design and implement internal control procedures for organizations. Explain the purpose of internal control procedures. Provide two examples of internal controls applied by companies.
Identify at least three main areas of opportunities for accounting professionals. For each area, identify at least three job possibilities linked to accounting.
Accounting professionals must sometimes choose between two or more acceptable methods of accounting for business transactions and events. Explain why these situations can involve difficult matters of ethical concern.
Identify which general accounting principle best describes each of the following practices:
In December 2006, Chavez Landscaping received a customer’s order and cash prepayment to install sod at a new house that would not be ready for installation until March 2007. Chavez should record the revenue from the customer order in March 2007, not in December 2006.
If $51,000 cash is paid to buy land, the land is reported on the buyer’s balance sheet at $51,000.
Jo Keene owns both Sailing Passions and Dockside Supplies. In preparing financial statements for Dockside Supplies, Keene makes sure that the expense transactions of Sailing Passions are kept separate from Dockside’s statements.
Total assets of Charter Company equal $700,000 and its equity is $420,000. What is the amount of its liabilities?
Total assets of Martin Marine equal $500,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity?
Accounting provides information about an organization’s business transactions and events that both affect the accounting equation and can be reliably measured. Identify at least two examples of both (a) business transactions and (b) business events that meet these requirements.
Indicate in which financial statement each item would most likely appear: income statement (I), balance sheet (B), statement of retained earnings (E), or statement of cash flows (CF).
Assets
Cash from operating activities
Dividends
Equipment
Expenses
Liabilities
Net decrease (or increase) in cash
Revenues
Total liabilities and equity
QS 1-11
Identifying items with financial statements
In a recent year’s financial statements, Home Depot reported the following results. Compute and interpret Home Depot’s return on assets (assume competitors average a 12% return on assets).
