Reading 30: Financial Reporting Mechanics LOS a习题精选 elements, accounts, 2010

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Session 7: Financial Reporting and Analysis: An Introduction
Reading 30: Financial Reporting Mechanics

LOS a: Explain the relationship of financial statement elements and accounts, and classify accounts into the financial statement elements.

A company’s chart of accounts is:

A) used for entries that offset other accounts.

B) the set of journal entries that makes up the components of owners’ equity.

C) a detailed list of the accounts that make up the five financial statement elements.

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A company’s chart of accounts is a detailed list of the accounts that make up the five financial statement elements and the line items presented in the financial statements. Contra accounts are used for entries that offset other accounts. The categories that make up owners’ equity are capital, additional paid-in capital, retained earnings and other comprehensive income.

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Accumulated depreciation and treasury stock are most likely to be shown as what types of accounts?

Accumulated depreciation

Treasury stock

A) Contra-asset Equity

B) Contra-asset Contra-equity

C) Liability Equity

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Accumulated depreciation is a contra-asset account to the asset account property, plant & equipment. Treasury stock is a contra-equity account to common stock or additional paid-in capital.

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Allowance for bad debts and investment in affiliates are most likely to be shown as what types of accounts?

Allowance for bad debts

Investment in affiliates

A) Contra-asset Liabilities

B) Liabilities Asset

C) Contra-asset Asset

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Allowance for bad debts is a contra-asset account to accounts receivable. Investments in affiliates are considered assets.