The income statement provides what information to the user?

1.Assets and liabilities of the company

2.Reports the cash of the company including cash income from sales

3.Reports the profits and/or losses of thebusiness through identifyingthe sales and expenses of acompany

4.Records the sales of stock and the dividends declared

A client's accounting records are unfamiliar to a new auditor.Where would a new auditor go to learn the names and numbers of the accounts being debited and credited in the transactions?

General Journal

Chart of Accounts

Internal control flowcharts

Inquire of the client

In the Accounting Process,what steps are considered inputs?

Transactions Occur,prepare documents

Prepare documents,record in journals,post to ledgers

Prepare trial balance,post adjustingentries

Prepare closing entries, prepare financial statements

In the Sales and Cash Receipt Transaction cycles,what accounts are affected in the Balance Sheet?

Sales, Sales Returns

Inventory,Accounts Payable

Cash,Accounts Receivable

Payroll Tax Expense,Freight -In

In the Purchases and Cash Disbursements Transaction cycles,what accounts are affected in the Income Statement?

Inventory,Prepaid Rent

Bad Debt Expense,Sales Returns

Dividends paid,treasury stock

Purchases,rent expense

Which of the following transactions would NOT be recorded in the Accounts Receivable journal?

Cash sale

Charge sale

Credit memo allowance for defective merchandise

Sales Return

What is the purpose of the General Ledger?

To give investors a snapshot of the financial status of a company

To summarize the transactions in journals by account balances

To record transactions for journals affecting the General Accounts

To itemize account balances for each customer

The primary reason for a flowchart is to prepare:

A sequential order to documents

A diagram that graphically depicts a company's documents and records

A flow of how internal control is performed

A symbol for every document in the Chart of Accounts

In the Sales Cycle, a bill of lading is used when:

Shipping goods

Receiving an order from a customer

Recording in a sales journal

Posting to General Ledger

In the Acronym ARCS,A stands for:

Admittance

Allocation

Accounts

Authorization