Accounting Exam 1 Questions And Answers
Accrual Accounting Accounting system which recognizes revenues when earned and
expenses when incurred regardless of when the related cash is exchanged
Adverse Opinion Opinion issued by a certified public accountant that means one or more
departures from...
Accrual Accounting Accounting system which recognizes revenues when earned and
expenses when incurred regardless of when the related cash is exchanged
Adverse Opinion Opinion issued by a certified public accountant that means one or more
departures from GAAP in a company's financial statements are so very material the auditors
believe the financial statements do not fairly represent the company's status
Adjusting Entry Entry that updates account balances prior to preparing financial
statements; a bookkeeping tool. Adjusting entries never affect the Cash account
Allocations Recognizing expenses by systematically assigning the cost of an asset to
periods of use
American Institute of CPA's National association that serves the education and
professional interests of member of the public accounting profession; membership is voluntary
Annual Reports Document companies publish to provide information, including financial
statements, to stockholders
, Accounting Exam 1 Questions And Answers
Asset Exchange Transaction A transaction that decreases one asset and increases another
asset; total asset remain unchanged.
Asset Source Transaction A transaction that increases both an asset and a claim on assets ;
the three types of asset source transactions are aquisitions from owners (equity), borrowing from
creditors (liabilities), or earnings from operations (revenues).
Asset Use Transaction A transaction that decreases both an asset and a claim on assets; 3
types are distributions, liability payments, or expenses
Asset Economic resource used to produce revenue which is expected to provide future
benefit to the business
Audits the verifying of facts or procedures
Balance Sheet A financial statement that summarizes a company's assets, liabilities and
shareholders' equity at a specific point in time.
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