Accounting Questions???
Accounting Questions???
1. Which financial statement would you analyze to determine if a company distributed any of its profits to its shareholders?
A. Statement of retained earnings B.Balance sheet
C. Neither of these statements D. Both of these statements
2. Which one of the following is an assumption made in the preparation of financial statements?
A. The current market value is assumed to be more relevant than the original cost paid
B. Financial statements are prepared for a specific entity that is distinct from the entity owners
C. Financial statements are prepared assuming that inflation has an effect on the entity
D. Preparation of financial statements for a specific time period assumes that the balance sheet covers a period of time
Answers:
Sandy: 1. Which financial statement would you analyze to determine if a company distributed any of its profits to its shareholders? A. Statement of retained earnings 2. Which one of the following is an assumption made in the preparation of financial statements? B. Financial statements are prepared for a specific entity that is distinct from the entity owners Economic entity assumption. Financial records must be separately maintained for each economic entity. Economic entities include businesses, governments, school districts, churches, and other social organizations. Although accounting information from many different entities may be combined for financial reporting purposes, every economic event must be associated with and recorded by a specific entity. In addition, business records must not include the personal assets or liabilities of the owners.
2008-01-22 17:33:28