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ETS Major Field Test - Financial Accounting Questions and Answers
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ETS Major Field Test - Financial Accounting Questions and Answers
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ETS Major Field Test - FinancialAccounting Questions and Answers
financial accounting - Answer -focuses on reporting financial information to external
parties such as investors, government agencies, banks, and suppliers based on GAAP
GAAP - Answer -generally accepted accounting principles are the accounting principles,
standards, and procedures that companies must follow when they compile their financial
statements
Entity Concept - Answer -an organization stands apart from other organizations as a
separate economic unit
going concern concept - Answer -entity will continue to operate long enough to recover
cost of its assets
time period concept - Answer -report information at regular intervals such as annually
reliability principle - Answer -accounting records must be based on the most reliable
data available (verifiable by an independent observer)
cost principle - Answer -assets/services acquired are recorded at actual historical cost
revenue principle - Answer -(a) establishes when to record revenue, ned, (b) revenue is
earned when the business has completed rendering services to the customer, and (c)
the amount to record is equal to the cash value of the services or goods
matching principle - Answer -expenses matched against revenues in the same
accounting period
accounting period - Answer -(a) usually one year ending December 31 (calendar year)
of each year, (b) fiscal year ends on any other date of the year
cash basis accounting - Answer -impact of events not recognized until cash is paid or
received
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