Exam (elaborations)
Survey of Accounting Exam #1 Questions and Answers
- Course
- Accounting
- Institution
- Accounting
Survey of Accounting Exam #1 Questions and Answers
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Survey of Accounting Exam #1Questions and Answers
Financing Activities - Answer-obtaining funds needed to form and operate a business
Investing Activities - Answer-using funds to obtain resources such as building, land
equipment, and selling these resources
Operating activities - Answer-using resources obtained through investing activities to
generate income
External Users - Answer-Creditor - one who's loaned money, stock holder, government,
customers
Internal Users - Answer-Company's internal management employees
Definition of Accounting - Answer-an information system that identifies, records, and
communicates information to users (internal, external) to help them make better
decisions. Communication is through financial statements.
Reports to internal users - Answer-managerial accounting
financial accounting - Answer-presents to internal and external
accounting rules - Answer-GAAP (Generally accepted accounting principles) -
developed by the financial accounting standards board - not govt. or the SEC (enforces
gap)
Principles that support GAAP - Answer-Business entity concept, cost concept, going
concern concept, matching concept, objectivity concept, unit of measure concept,
adequate disclosure concept, accounting period concept
Business entity concept - Answer-only report activities of business not the owners
activities
Cost concept - Answer-all items should be reported at what you actually pay for them
(like if you negotiated a car price, you must report that price)
Going concern concept - Answer-we have to assume the business will run indefinetly
matching concept - Answer-match up monies received with monies spent
objectivity concept - Answer-should have documentation to back up information
reported
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