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I. Financial Accounting
1) Cost, full disclosure, and matching are three of the basic accounting _________.
2) The FASB is responsible for developing new accounting _____________, which
will become part of GAAP.
3) GAAP is the acronym for generally ___________ accounting principles.
4) Large companies must use the _________-basis of accounting, rather than the
cash-basis of accounting.
5) A corporation's annual report to the SEC is the Form _______-K.
6) The difference between the amounts of assets and liabilities is stockholders'
7) The balance sheet is also referred to as the statement of financial __________.
8) If a corporation's stock is _________-traded, it will have additional financial
reporting requirements.
9) Distributions of some of a corporation's net income to the stockholders.
10) The word for an entry on the right side of an account.

1) The title of the asset account that reports the unexpired cost of insurance
premiums that have already been paid is _____________ Insurance.
2) The owner's equity section of a corporation's balance sheet is known as
shareholders equity or _______________________ equity.
3) The title of the liability account that reports amounts that were received by the
company before they were earned is ________________ Revenues.
4) The financial statement that reports the financial position of a company as of an
instant or point in time is the ________________ sheet.
5) The balance sheet reports amounts that apply at a particular ____________ in
6) An entry to the left-side of an account.
7) This component of Property, Plant & Equipment is not depreciated.
8) The accounting guideline that prevents assets from being reported at amounts
greater than their cost is the __________ principle.
9) Sometimes inventory is reported at an amount that is __________ than cost.
10) The basis or method of accounting that is less effective than the accrual basis in
measuring profitability.

III. Accounting Basics

1) Liabilities are amounts _______ by a company.
2) The collection of an account receivable will affect two _________ accounts.
3) Double-entry accounting is a key reason why the accounting ______________
remains in balance.
4) Along with owner's equity these are claims against a company's assets.
5) This word is often part of the account title of liabilities.
6) The accounting equation remains in balance because of the accounting system
known as __________-entry.
7) The financial statement with a structure similar to the accounting equation is the
__________ sheet.
8) Revenues + gains – expenses – losses = _____ income.
9) The balance sheet reports the financial position of a company at a moment or
________ in time.
10) A listing of all the accounts to which amounts can be posted is the ___ of

IV. Accounting Principles

1) The Conceptual _________________ was a discussion memorandum issued by
the FASB in the 1970s. Out of this came the FASB Statements of Financial
Accounting Concepts.
2) Accounting Research __________ were issued between 1939 and 1959. The ARBs
remain a source of accounting principles unless superseded by the APB or FASB.
3) _______________ practices or peculiarities allow for modifications of accounting
principles. Often this involves companies that are regulated by the federal
government, such as banks, utilities, investment firms, and insurance companies.
4) The matching principle requires that expenses be matched with the related
__________________ reported on the income statement.
5) Conservatism is often associated with this rule for inventory valuation. (acronym)
6) The assumption that the purchasing power of the dollar is constant is the
__________________ unit assumption.
7) A qualitative characteristic associated with verifiability and "you can depend on
8) The cost principle is often referred to as the ______________ cost principle.
9) As a result of this principle, assets are recorded at the amount spent to acquire
them rather than the amount that will be received when they are sold.
10) Accrual accounting is associated with this principle.

V. Adjusting Entries
1) Customer deposits for future services will be listed under which financial
statement category? (assets, liabilities, expenses, etc.)
2) The accounting principle that requires expenses to be reported on the income
statement when they occur rather than when they are paid.
3) A prepaid expense is reported as which type of account? (asset, liability, expense,
4) Depreciation is the systematic ________________ of the cost of an asset (used in a
business) to expense over the useful life of the asset. (It is not a valuation technique.)
5) The time _________ assumption is also known as the periodicity assumption. It
means that an ongoing business can be divided into years, quarters, months, etc.
6) On December 1 a company purchased $700 of supplies—approximately a three-
month supply. On December 1 the asset Supplies was debited for $700. On
December 31 the company needs to prepare a prepayment-type ___________ entry.
7) Adjusting entries are used to convert accounting information from the cash basis
of accounting to the ______________ basis of accounting.
8) The typical number of accounts involved in an adjusting entry.
9) An adjusting entry to recognize that part of a customer's prepayment has been
earned will include a __________ to a liability account.
10) The accrued interest that the bank has earned but has not yet ______________
is reported as a debit balance in the account Interest Receivable.

VI. Balance Sheet

1) A company's own stock that has been repurchased but has not been retired is
__________________ stock.
2) The basic _________________ equation is A = L + OE.
3) The accounting principle that prevents assets from being reported at their
current value.
4) The balance sheet classification under which a company reports customer
deposits and receipts for services that have not yet been performed.
5) Banks and others who have lent money or supplied goods and services on credit.
6) A detailed listing of a company's accounts receivable sorted by the date of sale or
the due date of the receivable is known as an ___________ of accounts receivable.
7) Money market accounts and a U.S. Treasury bill that matures in 45 days are
examples of cash _______________________.
8) A balance sheet issued between the end-of-year balance sheets is referred to as an
__________________ financial statement.
9) Balance sheet accounts are often referred to as real or ____________________
10) The cost flow assumption that will result in older costs remaining on the balance
sheet. (acronym)

VII. Break-even Point & Cost Estimation

1) When using one of the techniques for analyzing a mixed cost, it is important to
prepare a scatter- ______ of all of the observations to be certain that the data does
not contain an outlier.
2) The coefficient of _______________, represented by r2, indicates the percentage
change in the dependent variable (e.g. total cost in the shipping department) that is
explained by the change in the independent variable (e.g. the number of parcels
3) The breakeven point in sales dollars can be found by dividing the fixed costs and
expenses by the contribution margin _______ or percentage.
4) Make or buy decisions usually rely on cost behavior in the ________-run.
5) A high degree of correlation does not guarantee that there is a _________-and-
effect relationship between the independent and dependent variables.
6) A company has one product with a selling price of $20 and variable costs and
expenses of $8 per unit. The fixed costs and expenses are $32,000 and the company
has a target profit of $28,000. To reach the target profit, the company must sell
________ thousand units of the product.
7) A product sells for $20 and it has variable costs and expenses of $8 per unit. The
contribution margin ratio for this product is ________ percent.
8) A product sells for $30 and has variable costs and expenses of $18 per unit. The
fixed costs and expenses are $20,000. The breakeven point in sales dollars is
_________ thousand dollars.
9) Total fixed costs and expenses divided by the contribution margin per unit gives
you the breakeven point in ________.
10) The number of independent variables in multiple regression is ______ or more.

VIII. Cash Flow Statement

1) The conversion of bonds into common stock is an example of
_____________________ information that is reported outside of the three major
sections of the statement of cash flows.
2) Companies using the indirect method must also disclose the amount paid for
___________ and income taxes.
3) Cash __________ (plural) from financing activities occur when a corporation
issues equity securities, bonds, and long-term notes.
4) The purchase of _____________ stock will be reported as a decrease in the cash
provided by financing activities.
5) The ________ (gain, loss) on the sale of an asset used in a company's business will
be a deduction to the cash provided by operating activities under the indirect
6) The _________________ (similar to repurchase or retirement) of bonds payable
will decrease the cash provided by financing activities.
7) The 2006 statement of cash flows of ABC Corp. explains the change in the cash
and ________ equivalents from December 31, 2005 through December 31, 2006.
8) The entire____________ from the sale of an asset used in the business will be
reported as an increase in the cash provided by investing activities.
9) An increase in Accounts __________ would be an increase in the cash provided
by operating activities under the indirect method.
10) Cash _________ (opposite of inflows) from investing activities occur when a
corporation purchases equipment to be used in the business and when it makes a
long-term investment in another corporation

IX. Financial Statements

1) The cost flow assumption that results in less net income when the cost of the
inventory items is increasing.
2) The income statement format that reports the amount of gross profit as a line
item is the _____________-step format.
3) A corporation's own stock that has been purchased by the corporation but is not
retired is ___________ stock.
4) When an accountant is faced with two possible alternatives for reporting a
situation, this accounting guideline directs the accountant to select the alternative
that will result in less net income and less asset amount (or a greater liability
5) When a long-term asset is sold for less than its book value, the difference is
reported on the income statement as a ______.
6) An accounting year ending with a date other than December 31 is a _________-
year company.
7) A long-term asset used in a business that does not get depreciated.
8) The cumulative earnings of a corporation minus the cumulative dividends
declared by the corporation is generally the amount reported on the balance sheet
as ____________ Earnings.
9) The __________ of the financial statements includes the company name and the
name of the financial statement.
10) Dividends that a corporation declares and pays are reported under this activity
on the statement of cash flows.

X. Inventory and Cost of Goods Sold

1) The ___________ -average cost is associated with the perpetual system of
2) A manufacturer assigning direct materials, direct labor, and both variable and
fixed overhead to its production output is referred to as ____________________ (or
full) costing.
3) _____________ identification might be used instead of FIFO, LIFO, and average
when determining the cost of goods sold and the ending inventory.
4) If a retailer's net ______________ of merchandise during an accounting period
was $200,000 and its inventory decreased by $20,000 during that period, the income
statement will report the cost of goods sold as $220,000.
5) Inventory is reported on the balance sheet as a ____________ asset.
6) Inventory is reported at this amount if it is lower than cost. The "M" in LCM.
7) This inventory cost flow assumption will result in lower profits when there is
deflation in the cost of the inventory items. (accronym)
8) The inventory system where the Inventory account is increased whenever
merchandise is purchased and is decreased whenever merchandise is sold.
9) A method of estimating ending inventory when both the cost and retail amounts
are known.
10) When goods are shipped FOB Shipping Point, the __________ will incur
freight-in costs.

X. Stockholders' Equity
1) A type of preferred stock that entitles its owners to receive past omitted
dividends plus the current dividend before the common stockholders receive a
2) The maximum number of shares of stock that a corporation can issue is the
________________ number of shares of stock.
3) Dividends declared by a corporation, but not yet paid, are reported on the
balance sheet as a __________________.
4) A 15% stock dividend is considered to be a ____________ (small, large) stock
5) A corporation's stock that has been repurchased by the corporation but has not
been retired is _____________ stock.
6) The percentage of ownership in a corporation is dependent upon the number of
_________ of stock owned.
7) When stock is issued for something other than cash, such as land, the land and
the stock are recorded at the fair market ___________ of the land or the stock
issued whichever is more clearly determinable.
8) One component of the book value of preferred stock is its ________ price.
9) Appointed by the board of directors of a corporation to carry out its policies.
10) Corporations may not report a _______ or loss on the sale of its treasury stock.