Accounting: Chapter 1

3. Financial accounting does not deal with which of the following?
A. Measuring a company's economic activity.
B. Preparing financial reports.
C. Making business decisions.
D. Communicating financial results to investors. – C. Making business decisions.
JJ White planned to use $82 of material per unit but actually used $80 of material per unit, and planned to make 1,200 units but actually made 1,000 units.

The flexible-budget variance is:
a. $2,000 favorable
b. $14,000 unfavorable
c. $16,400 unfavorable
d. $2,400 favorable – a. $2,000 favorable

accrued interest expense = – principal amount owed + amount interest rate * fraction of year since last payment
There are two sections to the statement of cash flows-operating activities and investing activities. – False
Post-closing Trial Balance – A list of the accounts and their balance at the end of the period after journalizing and posting the closing entries. It should include only permanent accounts.
Stockholders equity – Акционерный капитал
income statement – reports the revenues minus the expenses of the accounting period
Which statement is correct regarding capillary exchange?
matching principle – A principle that requires the matching of revenues earned during an accounting period with the expenses incurred to produce the revenues
6. – Know the normal balances for the different accounts:
Quick (Acid-Test) Ratio – a stricter test of a company's liquidity
Accounts Payable – Used when cash is paid in a period AFTER receiving services. Accounts payable is OWED to suppliers.
Which stаtement is cоrrect regаrding cаpillary exchange?
Долговой сертификат – Certificate of indebtedness
prepaid expenses – current asset
​Providing Cash – Determining that the amount of cash agrees with the accounting records

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