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ACG 3131 EXAM 1 PRACTICE QUESTIONS AND ANSWERS $13.99
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Exam (elaborations)

ACG 3131 EXAM 1 PRACTICE QUESTIONS AND ANSWERS
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  • ACG 3131
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  • ACG 3131

Indicate to which category of elements of financial statements it belongs: Loss on sale of equipment Losses Indicate the financial statement on which this account would be reported. Accumulated Depreciation Balance Sheet Indicate the financial statement on which this account would be reported. ...

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  • August 11, 2024
  • 32
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • acg 3131 exam 1 practice questions and answers
  • indicate to which category of elements of financia
  • loss on sale of equipment losses indicate the fin

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  • ACG 3131
  • ACG 3131

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ACG 3131 EXAM 1 PRACTICE
QUESTIONS AND ANSWERS
Indicate to which category of elements of financial statements it belongs:

Loss on sale of equipment ✅Losses

Indicate the financial statement on which this account would be reported.

Accumulated Depreciation ✅Balance Sheet

Indicate the financial statement on which this account would be reported.

Depreciation Expense ✅Income Statement

Indicate the financial statement on which this account would be reported.

Retained Earnings (beginning) ✅Retained Earnings Statement

Indicate the financial statement on which this account would be reported.

Dividends ✅Retained Earnings Statement

Indicate the financial statement on which this account would be reported.

Service Revenue ✅Income Statement

Indicate the financial statement on which this account would be reported.

Supplies ✅Balance Sheet

Indicate the financial statement on which this account would be reported.

Accounts Payable ✅Balance Sheet

Is this account included in a post-closing trial balance?

Accumulated Depreciation ✅Included

Is this account included in a post-closing trial balance?

Depreciation Expense ✅Not Included

,Is this account included in a post-closing trial balance?

Retained Earnings (ending) ✅Included

Is this account included in a post-closing trial balance?

Dividends ✅Not Included

Is this account included in a post-closing trial balance?

Service Revenue ✅Not Included

Is this account included in a post-closing trial balance?

Supplies ✅Included

Is this account included in a post-closing trial balance?

Accounts Payable ✅Included

Definition:
Information that is capable of making a difference in the decision-making outcome.
✅Relevance

Definition
Information to help users form expectations about the future. ✅Predictive Value

Definition:
Information that confirms or corrects prior expectations based on previous evaluations.
✅Confirmatory Value

Definition:
Information is material if omitting it or misstating it could influence decisions of the
users. Materiality is very hard to quantify. A company may consider whether the
information is material based on the nature and/or magnitude of the item(s).
✅Materiality

Definition:
Do the numbers and descriptions match what really happened or existed? ✅Faithful
Representation

Definition:
All information necessary is provided. Omission causes information to be misleading or
false. ✅Completeness

,Definition:
Information is unbiased-this is the overriding consideration. Do not give one set of
information to stockholders and another to lenders. ✅Neutrality

Definition:
Information is accurate but does not mean total freedom from error. Estimates are used
to predict uncollectible accounts, useful life of assets. ✅Free from Error

Definition:
complement the fundamental qualities ✅Enhancing Qualities

Definition:
Companies record and report information in a similar manner. Consistency is another
type of comparability in that a company uses the same accounting methods from one
period to the next. We will discuss the impact of the need to change accounting
methods so that consistency/comparability is maintained. ✅Comparability

Definition:
Independent people using the same methods arrive at similar conclusions. Examples:
two independent auditors would arrive at the same inventory figure if using the same
period of inventory. ✅Verifiability

Definition:
Information is available before it loses its relevance. Information provided a year after
the close of the accounting cycle is not as relevant for decision- making. ✅Timeliness

Definition:
Reasonably informed users should be able to comprehend information that is classified,
characterized, and presented clearly and concisely. ✅Understandability

Definition:
Probable future economic benefits as a result of past events (Debit part of the equation)
✅Assets

Definition:
Probable future sacrifices of benefits arising from obligations to transfer assets or
provide services (Credit part of the equation) ✅Liabilities

Definition:
Residual interest in assets remaining after deducting liabilities. In a business, this is the
ownership interest. (Credit part of the equation). ✅Equity

Definition:

, Purchase of ownership by giving assets to business entity. May involve providing
services or conversion of liabilities owed to stock. ✅Investments by Owners

Definition:
Distribution to owner decreased ownership interests or equity. Most often in form of
dividends. Can also arise from the transfer of assets or rendering services
✅Distribution to Owners

Definition:
Change in equity or net assets during a period from events from nonowner sources. It
includes changes in equity that do not involve investments by owners or distributions to
owners. ✅Comprehensive Income

Definition:
Inflows of assets of an entity or settlement of liabilities (unearned revenues) from
delivering or producing goods, services, or activities from the ongoing major operations.
✅Revenues

Definition:
Outflows using assets or incurrence of liabilities from delivering or producing goods or
services, carrying on other activities from the ongoing major operations. ✅Expenses

Definition:
Increase in net assets (equity) from peripheral or incidental transactions of an entity.
Example: Gain from sale of property, plant and equipment. ✅Gains

Definition:
Decrease in net assets (equity) from peripheral or incidental transactions of an entity.
Example: Loss from sale of property, plant and equipment. ✅Losses

Definition:
Certain assumptions are important to understanding the manner of data presentation.
✅Assumptions

Definition:
Assumes that the company is separate and distinct from its owners or other business
units. ✅Economic Entity

Definition:
A company is assumed to have a long-life. Thus, the company uses the historical cost
principle. If liquidation of entity appears imminent, this assumption is not used and
assets would be restated. ✅Going Concern Assumption

Definition:

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