HSM 340 Week 2 Quiz

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1. Question : (TCO 2) A statement that reports inflows and outflows of cash during the accounting period in the categories of operations, investing, and financing, is called a(an): Student Answer: Income statement Statement of retained earnings Balance sheet Statement of cash flows Report of management Instructor Explanation: Chapter 9 Points Received: 0 of 5 Comments: Question 2. Question : (TCO 2) Two major methods of asset valuation are: Student Answer: historical cost and future cost historical cost and acquisition cost historical cost and replacement cost acquisition cost and future cost Instructor Explanation: Chapter 10 Points Received: 5 of 5 Comments:…show more content…
Instructor Explanation: The cash basis of accounting records revenues when cash is received and expenses when cash is paid out. The accrual basis of accounting records revenues when they are earned and expenses when resources are used. Points Received: 5 of 5 Comments: Question 6. Question : (TCO 2) What is an accounting entity? Student Answer: An accounting entity can be either a business or subdivisions of a business that engages in economic activities, has economic assets and resources that must be accounted and is separate from the personal dealings of its owners. Instructor Explanation: An accounting entity is an organization for which financial data are to be collected (separate and distinct from its owners). Points Received: 5 of 5 Comments: Question 7. Question : (TCO 2) The HC method, which uses unadjusted historical costs, does not take into account depreciation expenses, purchasing power, and unrealized gains in replacement value. Despite these weaknesses as a financial reporting method, the HC method is used more frequently for accounting purposes than other methods, such as the HC-GPL, CV, and CV-GPL methods. Why is this so? Student Answer: Instructor Explanation: The HC method of reporting is regarded by many as the most objective method of accounting and is consistent with the accounting principles of cost valuation. It is and has been widely used and

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