Financial Accounting Exam Questions with 100% Correct Answers
1 view 0 purchase
Course
Financial Accounting
Institution
Financial Accounting
Accounting - Answer-the information system that measures business activities, processes that information into reports and financial statements and communicates the results to decisions makers
Accounting Equation - Answer-Assets = Liabilities + Owner's Equity
Asset - Answer-an economic resourc...
Financial Accounting Exam Questions
with 100% Correct Answers
Accounting - Answer-the information system that measures business activities,
processes that information into reports and financial statements and communicates the
results to decisions makers
Asset - Answer-an economic resource that is expected to be of benefit in the future
Balance Sheet - Answer-List of an entity's assets liabilities and owners equity as of a
specific date. also called the statement of financial position
Board of directors - Answer-Group selected by the stockholders to set policy for a
corporation and to appoint its officers
capital - Answer-Another name for the owners equity of a business
Common Stock - Answer-The most basic form of capital stock
Continuity assumption - Answer-the entity will continue to operate long enough to use
existing assets (land buildings equipment and supplies)
Corporation - Answer-a business owned by stockholders. A corporation is a legal entity,
an artificial person in the eyes of the law
Current Assets - Answer-An asset that is expected to be converted to cash, sold, or
consumed during the next 12 months, or within the business's normal operating cycle if
longer than a year
Current Liability - Answer-A debt due to be paid within one year or within the entity's
operating cycle if the cycle is longer than a year
Deficit - Answer-Negative balance in retained earnings caused by a net loss over a
period of years
Dividends - Answer-Distributions (usually cash) by a corporation to its stockholders
Entity - Answer-An organization or a section of an organization that, for accounting
purposes, stand apart from other organizations and individual as a separate economic
unit
,Ethics - Answer-Standards of right and wrong that transcend economic and legal
boundaries. Ethical standards deal with the way we treat others and restrain our own
action because of the desires, expectations, or rights of others or because of our
obligations to them
Expenses - Answer-Decrease in retained earnings that results from operations; the cost
of doing business; opposite of revenuse
Fair value - Answer-the amount that a business could sell an asset for, or the amount
that a business could pay to settle liability
Financial accounting - Answer-The branch of accounting that provides information to
people outside the firm
Financial statements - Answer-Business documents that report financial information
about a business entity to decision makers
Financing activities - Answer-Activities that obtain from investors and creditors that cash
needed to launch and sustain the business a section of the statements of cash flow
Generally Accepted Accounting Principles - Answer-Accounting guidelines formulated
by the financial accounting standards board that govern how accounting is practiced
going concern assumption - Answer-holds that the entity will remain in operations for
the foreseeable future
Historical cost principle - Answer-Principle that states that assets and services should
be recorded at their actual cost
income statement - Answer-A financial statement listing an entity's revenues, expenses,
and net income or net loss for a specific period. Also the statement of operations
International Financial Reporting Standards - Answer-Accounting guidelines, formulated
by the International Accounting Standards Board (IASB).U.S companies are expected to
adopt these principles for their financial statements so that they can be compared with
those of companies from other countries
Investing Activities - Answer-Activities that increase or decrease the long-term assets
available to the business, a section of the statement of cash flow
Liability - Answer-An economic obligation (a debt) payable to an individual or an
organization outside the business
limited liability company - Answer-A business organization in which the business (not
the owner) is liable for the company's debts
, Long-term debt - Answer-A liability that falls due beyond one year from the date of the
financial statements
management accounting - Answer-The branch of accounting that generates information
for the internal decisions makers of a business such as top executives
net income, net earnings,net profit - Answer-Excess of total revenues over total
expenses,Revenues minus Expenses=net income
net loss - Answer-Excess of total expenses over total revenue
operating Activities - Answer-Activities that create revenue or expenses in the entity's
major line of business; a section of the statement of cash flow, it also affects the income
statement
Owners equity - Answer-the claim of the owners of a business to the assets of the
business. Also called Capital, Stockholders Equity or net assets
Paid-in Capital - Answer-the amount of stockholders equity that stockholders have
contributed to the corporation. Also called contributed capital
partnership - Answer-An association of two or more persons who co-own a business for
profit
proprietorship - Answer-a business with a single owner
retained earnings - Answer-the amount of stockholders equity that the corporation has
earned through profitable operation and has not given back to stockholders
revenues - Answer-increase in retained earnings from delivering good or services to
customers or clients
shareholders/stockholders - Answer-A person who owns stock in a corporation
Stable-monetary unit assumptions - Answer-the reason for ignoring the effect of inflation
in the accounting records based on the assumption that the dollar's purchasing power is
relatively stable
Statement of cash flow - Answer-Reports cash receipts and cash payments classified
according to the entity's major activities such as operating, investing, and financing
Statement of cash flow - Answer-Reports cash receipts and cash payments classified
according to the entity's major activities ; operating, investing and financing
statement of retained earnings - Answer-Summary of the changes in retained earnings
of a corporation during a specific period
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller lectknancy. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $18.49. You're not tied to anything after your purchase.