UF ACG 2021 Exam 1 Practice Questions and Correct Answers
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Course
ACG 2021
Institution
ACG 2021
Financial Statements The business documents companies use to report the results of their activities to people that can include managers, investors, creditors, and regulatory agencies
Accounting An info system that measures business activities, processes data into financial statements, and reports,...
UF ACG 2021 Exam 1 Practice Questions
and Correct Answers
Financial Statements ✅The business documents companies use to report the results
of their activities to people that can include managers, investors, creditors, and
regulatory agencies
Accounting ✅An info system that measures business activities, processes data into
financial statements, and reports, communicates, results to decision-makers
Accounting Cycle ✅The process by which a company's financial statements are
prepared (not to be confused with bookkeeping)
Proprietorship ✅A business owned by one person
Partnership ✅A business in which two or more persons combine their assets and skills
Limited-Liability Company (LLC) ✅A form of business ownership that offers both
limited liability to its owners and flexible tax treatment
Corporation ✅A business owned by stockholders who share in its profits but are not
personally responsible for its debts
What must the info under GAAP have? ✅Relevance and faithful representation
4 Characteristics ✅Comparability, Verifiability, Timeliness, and Understandibility
Entity Assumption ✅An organization stands apart from other organizations and
individuals as a separate economic unit
Continuity Assumption ✅States that businesses are assumed to continue to operate
into the foreseeable future (Also known as the going-concern assumption)
Historical Cost Principle ✅An accounting principle that states that companies should
record assets at their cost
Fair Value ✅The price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date
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