Dasd
Chapter 1 Environment and Theoretical Structure of Financial Accounting
BRIEF Exercises
Brief Exercise 1–1 Revenues ($340,000 + 60,000) $400,000 Expenses: Rent ($40,000 ( 2) (20,000) Salaries (120,000) Utilities ($50,000 + 2,000) (52,000) Net income $208,000
Exercises
Exercise 1–6
1. Liability 2. Distribution to owners 3. Revenue 4. Assets, liabilities and equity 5. Comprehensive income 6. Gain 7. Loss 8. Equity 9. Asset 10. Net income 11. Investment by owner 12. Expense
Exercise 1–7
List A List B
o 1. Predictive value a. Decreases in equity resulting from transfers to owners. h 2. Relevance b. Requires consideration of the costs and value of information. g 3. Timeliness c. Important for making interfirm comparisons. a 4. Distribution to owners d. Applying the same accounting practices over time. j 5. Confirmatory value e. Users understand the information in the context of the decision being made. e 6. Understandability f. Agreement between a measure and the phenomenon it purports to represent. n 7. Gain g. Information is available prior to the decision. f 8. Faithful representation h. Pertinent to the decision at hand. k 9. Comprehensive income i. Implies consensus among different measurers. p 10. Materiality j. Information confirms expectations. c 11. Comparability k. The change in equity from nonowner transactions. m 12. Neutrality l. The process of admitting information into financial statements. l 13. Recognition m. The absence of bias. d 14. Consistency n. Results if an asset is sold for more than its book value. b 15. Cost effectiveness o. Information is useful in predicting the future. i 16. Verifiability p. Concerns the
BRIEF Exercises
Brief Exercise 1–1 Revenues ($340,000 + 60,000) $400,000 Expenses: Rent ($40,000 ( 2) (20,000) Salaries (120,000) Utilities ($50,000 + 2,000) (52,000) Net income $208,000
Exercises
Exercise 1–6
1. Liability 2. Distribution to owners 3. Revenue 4. Assets, liabilities and equity 5. Comprehensive income 6. Gain 7. Loss 8. Equity 9. Asset 10. Net income 11. Investment by owner 12. Expense
Exercise 1–7
List A List B
o 1. Predictive value a. Decreases in equity resulting from transfers to owners. h 2. Relevance b. Requires consideration of the costs and value of information. g 3. Timeliness c. Important for making interfirm comparisons. a 4. Distribution to owners d. Applying the same accounting practices over time. j 5. Confirmatory value e. Users understand the information in the context of the decision being made. e 6. Understandability f. Agreement between a measure and the phenomenon it purports to represent. n 7. Gain g. Information is available prior to the decision. f 8. Faithful representation h. Pertinent to the decision at hand. k 9. Comprehensive income i. Implies consensus among different measurers. p 10. Materiality j. Information confirms expectations. c 11. Comparability k. The change in equity from nonowner transactions. m 12. Neutrality l. The process of admitting information into financial statements. l 13. Recognition m. The absence of bias. d 14. Consistency n. Results if an asset is sold for more than its book value. b 15. Cost effectiveness o. Information is useful in predicting the future. i 16. Verifiability p. Concerns the