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Accounting 200 Exam Questions with Verified Answers
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Accounting 200 Exam Questions with Verified Answers
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Accounting 200 Exam Questions withVerified Answers
account payable - Answer-a liability backed by the general reputation and credit
standing at the debtor.
accounting - Answer-the information system that measures business activities,
processes that information into reports and financial statements, and communicates the
results to decision makers.
accounting equation - Answer-assets=liabilities+ owners equity
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 owner's equity as of a
specific date. also called the statement of financial position.
board of directors - Answer-group elected by the stockholders to set policy for a
corporation and to appoint its officers.
capital - Answer-another name for the owner's equity of a business
cash - Answer-money and any medium of exchange that a bank accepts at face value.
common stock - Answer-the most basic form of capital stock.
continuity (going concern) assumption - Answer-holds that the entity will remain in
operation for the foreseeable future.
corporation - Answer-a business owned by stockholders. It is a legal entity, an "artificial
person" in the eyes of the law.
current asset - 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 net losses 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, stands apart from other organizations and individuals as a separate
economic unit.
expenses - Answer-decrease in retained earnings that results from operations; the cost
of doing business;opposite of revenues.
fair value - Answer-the amount that a business could sell an asses for, or the amount
that a business could pay to settle a 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.
financial activities - Answer-activities that obtain from investors and creditors the cash
needed to launch and sustain the business; a section of the statement of cash flows.
fixed assets and plant assets - Answer-other names for property, plant, and equipment.
GAAP - Answer-accounting guidelines, formulated by the Financial Standards Board,
that govern how accounting is practiced.
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 called the statement of operations.
IFRS - Answer-accounting guidelines, formulated by the international accounting
standards board.
investing activities - Answer-activities that increase or decrease the long-term assets
available to the business; a section of the statement of cash flows.
liability - Answer-an economic obligation (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 form the date of the
financial statements.
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