Saint MBa 560 question bank

QUESTIONS

1. 1. Explain the term stakeholder. Distinguish between stakeholders with a direct versus an indirect interest in the companies that issue accounting reports.
2. 2. Why is accounting called the language of business?
3. 3. What is the primary mechanism used to allocate resources in the United States?
4. 4. In a business context, what does the term market mean?
5. 5. What market trilogy components are involved in the process of transforming resources into finished products?
6. 6. Give an example of a financial resource, a physical resource, and a labor resource.
7. 7. What type of return does an investor expect to receive in exchange for providing financial resources to a business? What type of return does a creditor expect from providing financial resources to an organization or business?
8. 8. How do financial and managerial accounting differ?
9. 9. Describe a not-for-profit or nonprofit enterprise. What is the motivation for this type of entity?
10. 10. What are the U.S. rules of accounting information measurement called?
11. 11. Explain how a career in public accounting differs from a career in private accounting.
12. 12. Distinguish between elements of financial statements and accounts.
13. 13. What role do assets play in business profitability?
14. 14. To whom do the assets of a business belong?
15. 15. What is the nature of creditors’ claims on assets?

· 16. What term describes creditors’ claims on the assets of a business?

· 17. What is the accounting equation? Describe each of its three components.

· 18. Who ultimately bears the risk and collects the rewards associated with operating a business?

· 19. What does a double-entry bookkeeping system mean?

· 20. How does acquiring capital from owners affect the accounting equation?

· 21. What is the difference between assets that are acquired by issuing common stock and those that are acquired using retained earnings?

· 22. How does earning revenue affect the accounting equation?

· 23. What are the three primary sources of assets?

· 24. What is the source of retained earnings?

· 25. How does distributing assets (paying dividends) to owners affect the accounting equation?

· 26. What are the similarities and differences between dividends and expenses?

· 27. What four general-purpose financial statements do business enterprises use?

· 28. Which of the general-purpose financial statements provides information about the enterprise at a specific designated date?

· 29. What causes a net loss?

· 30. 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.

· 31. How are asset accounts usually arranged in the balance sheet?

· 32. Discuss the term articulation as it relates to financial statements.

· 33. How do temporary accounts differ from permanent accounts? Name three temporary accounts. Is retained earnings a temporary or a permanent account?

· 34. What is the historical cost concept and how does it relate to the reliability concept?

· 35. 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.

· 36. What type of information does a business typically include in its annual report?

· 37. What is U.S. GAAP? What is IFRS?