1. ________ are items owed to a creditor. ________ are itemsowned by a company. ________ represents owners' claims to companyresources.

Expenses; Revenues; Net income

Expenses; Revenues; Stockholders??? equity

Liabilities; Assets; Stockholders' equity

Liabilities; Assets; Net income

2. Under ________ accounting, revenues are recorded when earnedand expenses are recorded with related revenues. Under ________accounting, revenues are recorded when cash is received andexpenses are recorded when cash is paid out. Financial statementsare 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 setaccounting standards. Currently, this responsibility has beendelegated to the________.

Securities and Exchange Commission; International AccountingStandards Board

International Accounting Standards Board; Financial AccountingStandards Board

Securities and Exchange Commission; Financial AccountingStandards Board

Financial Accounting Standards Board; Securities and ExchangeCommission

4. In what order are the four primary financial statementsprepared?

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

Balance sheet> Income statement > Statement of cashflows> Statement of stockholders' equity

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

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

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

Addition to retained earnings

Ending balance in retained earnings

Gross profit

Total stockholders??? equity