1. ________ are items owed to a creditor. ________ are items owned by a company. ________ represents owners' claims to company resources.

Expenses; Revenues; Net income

Expenses; Revenues; Stockholders equity

Liabilities; Assets; Stockholders' equity

Liabilities; Assets; Net income

2. Under ________ accounting, revenues are recorded when earned and expenses are recorded with related revenues. Under ________ accounting, revenues are recorded when cash is received and expenses are recorded when cash is paid out. Financial statements are prepared using ________ accounting.

cash-basis; accrual-basis; accrual-basis

cash-basis; accrual-basis; cash-basis

accrual-basis; cash-basis; cash-basis

accrual-basis; cash-basis; accrual-basis

3. The ________ retains the power and authority to set accounting standards. Currently, this responsibility has been delegated to the________.

Securities and Exchange Commission; International Accounting Standards Board

International Accounting Standards Board; Financial Accounting Standards Board

Securities and Exchange Commission; Financial Accounting Standards Board

Financial Accounting Standards Board; Securities and Exchange Commission

4. In what order are the four primary financial statements prepared?

Statement of stockholders' equity > Income statement > Balance sheet > Statement of cash flows

Balance sheet> Income statement > Statement of cash flows> Statement of stockholders' equity

Income statement > Statement of stockholders' equity > Balance sheet > Statement of cash flows

Income statement > Balance sheet > Statement of stockholders' equity > Statement of cash flows

5. The difference between net income and dividends paid is known as what?

Addition to retained earnings

Ending balance in retained earnings

Gross profit

Total stockholders equity