This is “End-of-Chapter Exercises”, section 2.5 from the book Accounting in the Finance World (v. 1.0).
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Which of the following is not an example of an uncertainty companies face in their financial reporting?
Which of the following is true about U.S. GAAP?
Questions 3, 4, and 5 are based on the following:
Mike Gomez owns a music store called Mike’s Music and More. The store has inventory that includes pianos, guitars, and other musical instruments. Mike rents the building in which his store is located, but owns the equipment and fixtures inside it. Last week, Mike’s Music made sales of $3,000. Some of the sales were made in cash. Some were made to customers who have an account with Mike’s Music and are billed at the end of the month. Last month, Mike’s Music borrowed $10,000 from a local bank to expand.
Which of the following is not an asset owned by Mike’s Music?
Which of the following is a liability to Mike’s Music?
Which of the following is a true statement?
Mark each of the following with an (A) to indicate it is an asset, an (L) to indicate it is a liability, an (R) to indicate it is revenue, or an (E) to indicate it is an expense.
The chapter introduces the Financial Accounting Standards Board (FASB) as the body that has primary responsibility for determining U.S. GAAP. You can learn more about this organization at http://www.fasb.org. On the menu to the left, click on “Facts about FASB.”
Four fundamental accounting terms were introduced in Chapter 2 "What Should Decision-makers Know So That Good Decisions Can Be Made about an Organization?": assets, liabilities, revenues, and expenses. We will explore these items further by examining the financial statements of Starbucks. You can access their financial statements by visiting http://www.starbucks.com. You will need to click “about us” at the top and then “investor relations” on the left. Click on “annual reports” in the menu on the left. Select the 2007 Annual Report—Financials. On the left side menu, select Item 8 (financial statements).