Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 1 - Introduction to Financial Statements - Exercises - Page 30: E1-2

Answer

(a) Basic accounting equation (8) (b) Certified public accountant (CPA) (1) (c) Dividends (4) (d) Expenses (9) (e) Liabilities (10) (f) Management discussion and analysis (MD&A) (2) (g) Net loss (6) (h) Revenue (3) (i) Sarbanes-Oxley Act (SOX) (11) (j) Sole proprietorship (7) (k) Stockholders’ equity (5)

Work Step by Step

Match each term or phrase to its description below. a. _______ Assets = Liabilities + Stockholders' Equity. b. _______ An individual who has met certain criteria and is thus allowed to perform audits of corporations. c. _______ Payments of cash from a corporation to its stockholders. d. _______ The cost of assets consumed or services used in the process of generating revenues. e. _______ Amounts owed to creditors in the form of debts and other obligations. f. _______ A section of the annual report that presents management's views on the company's ability to pay near-term obligations, its ability to fund operations and expansion, and its results of operations. g. _______ The amount by which expenses exceed revenues. h. _______ The increase in assets or decrease in liabilities resulting from the sale of goods or the performance of services in the normal course of business. i. _______ Regulations passed by Congress to reduce unethical corporate behavior. j. _______ A business owned by one person. k. _______ The owners' claim to assets.
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