Skip to ContentGo to accessibility pageKeyboard shortcuts menu
OpenStax Logo
Principles of Accounting, Volume 1: Financial Accounting

Questions

Principles of Accounting, Volume 1: Financial AccountingQuestions
Search for key terms or text.
1.

LO 2.1Identify the four financial statements and describe the purpose of each.

2.

LO 2.1Define the term stakeholders. Identify two stakeholder groups, and explain how each group might use the information contained in the financial statements.

3.

LO 2.1Identify one similarity and one difference between revenues and gains. Why is this distinction important to stakeholders?

4.

LO 2.1Identify one similarity and one difference between expenses and losses. Why is this distinction important to stakeholders?

5.

LO 2.1Explain the concept of equity, and identify some activities that affect equity of a business.

6.

LO 2.2Explain the difference between current and noncurrent assets and liabilities. Why is this distinction important to stakeholders?

7.

LO 2.2Identify/discuss one similarity and one difference between tangible and intangible assets.

8.

LO 2.2Name the three types of legal business structure. Describe one advantage and one disadvantage of each.

9.

LO 2.2What is the “accounting equation”? List two examples of business transactions, and explain how the accounting equation would be impacted by these transactions.

10.

LO 2.3Identify the order in which the four financial statements are prepared, and explain how the first three statements are interrelated.

11.

LO 2.3Explain how the following items affect equity: revenue, expenses, investments by owners, and distributions to owners.

12.

LO 2.3Explain the purpose of the statement of cash flows and why this statement is needed.

PreviousNext
Order a print copy
Citation/Attribution

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution-NonCommercial-ShareAlike License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters
Citation information

© Jul 16, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.