1. 1. Explain
    the term stakeholder. Distinguish between stakeholders with a
    direct versus an indirect interest in the companies that issue accounting
  2. 2. Why
    is accounting called the language of business?
  3. 3. What
    is the primary mechanism used to allocate resources in the United States?
  4. 4. In
    a business context, what does the term market mean?
  5. 5. What
    market trilogy components are involved in the process of transforming
    resources into finished products?
  6. 6. Give
    an example of a financial resource, a physical resource, and a labor
  7. 7. What
    type of return does an investor expect to receive in exchange for
    providing financial resources to a business? What type of return does a
    creditor expect from providing financial resources to an organization or
  8. 8. How
    do financial and managerial accounting differ?
  9. 9. Describe
    a not-for-profit or nonprofit enterprise. What is the motivation for this
    type of entity?
  10. 10. What
    are the U.S. rules of accounting information measurement called?
  11. 11. Explain
    how a career in public accounting differs from a career in private
  12. 12. Distinguish
    between elements of financial statements and accounts.
  13. 13. What
    role do assets play in business profitability?
  14. 14. To
    whom do the assets of a business belong?
  15. 15. What
    is the nature of creditors’ claims on assets?

16. What term describes creditors’ claims on the assets of a

17. What is the accounting equation? Describe each of its three

18. Who ultimately bears the risk and collects the rewards
associated with operating a business?

19. What does a double-entry bookkeeping system mean?

20. How does acquiring capital from owners affect the accounting

21. What is the difference between assets that are acquired by
issuing common stock and those that are acquired using retained earnings?

22. How does earning revenue affect the accounting equation?

23. What are the three primary sources of assets?

24. What is the source of retained earnings?

25. How does distributing assets (paying dividends) to owners
affect the accounting equation?

26. What are the similarities and differences between dividends and

27. What four general-purpose financial statements do business
enterprises use?

28. Which of the general-purpose financial statements provides
information about the enterprise at a specific designated date?

29. What causes a net loss?

30. What three categories of cash receipts and cash payments do
businesses report on the statement of cash flows? Explain the types of cash
flows reported in each category.

31. How are asset accounts usually arranged in the balance sheet?

32. Discuss the term articulation as it relates to
financial statements.

33. How do temporary accounts differ from permanent accounts? Name
three temporary accounts. Is retained earnings a temporary or a permanent

34. What is the historical cost concept and how does it relate to
the reliability concept?

35. Identify the three types of accounting transactions discussed
in this chapter. Provide an example of each type of transaction, and explain
how it affects the accounting equation.

36. What type of information does a business typically include in
its annual report?

37. What is U.S. GAAP? What is IFRS?