100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
HBS CORE FINAL EXAM STUDY GUIDE TEST. CA$19.53   Add to cart
Quickly navigate to
Preview
  2.  
  3. Harvard University
  4.  
  5. HBS.

Exam (elaborations)

HBS CORE FINAL EXAM STUDY GUIDE TEST.
 7 views  0 purchase
  • Course
  • HBS.
  • Institution
  • Harvard University

HBS CORE FINAL EXAM STUDY GUIDE TEST. What Accounting Principle Does the Following Represent: Real Estate prices in Orderville have increased dramatically over the last five years. Although the land under Chad's office building is currently believed to be worth $500,000, it is recorded at $...

[Show more]

Preview 3 out of 16  pages

Document information

  • September 11, 2024
  • 16
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • hbs
  • hbs core final exam study guide test

Written for

  • Harvard University
  • HBS.
All documents for this subject (14)

Seller

avatar-seller
ROSEGRADES

Reviews received

Content preview

HBS CORE FINAL EXAM STUDY GUIDE
TEST.

What Accounting Principle Does the Following Represent:



Real Estate prices in Orderville have increased dramatically over the last five years. Although the land
under Chad's office building is currently believed to be worth $500,000, it is recorded at $250,000
because that is the price he paid for it. - CORRECT ANSWER Historical Cost Principle



What is the Accounting Equation? - CORRECT ANSWER Assets = Liabilities + Equity



What Accounting Principle Does the Following Represent:



AQG Industries purchases $20,000 of product on credit from RSI Manufacturing. AQG records the
purchase as an increase in inventory and an increase in accounts payable. AQG feels that they will be
able to realize the value from the inventory and settle the obligation to RSI in the weeks to come. -
CORRECT ANSWER "Going Concern" Concept



A "note payable for a bank loan" is an example of a... - CORRECT ANSWER Liability



The principle of Conservatism, says that a company should choose measurement methods that
anticipate and record _____________ but don't anticipate and record _____________. - CORRECT
ANSWER future losses; future gains



What Accounting Principle Does the Following Represent:



A microfinance institution has been relying on government collateral subsidies to finance start-ups in
rural areas. However, the government has cut the program recently. The company reports this situation
in its financial statements as this might affect the decisions of stakeholders. - CORRECT ANSWER
Materiality

,Cost of Goods Sold, Rent Expense, and Wages Expense are examples of what type of account? -
CORRECT ANSWER Expense Account



Sales Revenue & Deferred Revenue decrease with: Debit or Credit? - CORRECT ANSWER Debit



Cost of Goods Sold, Accounts Receivable, Cash: Increase or Decrease with a Credit - CORRECT ANSWER
Decrease



These accounts increase with a debit or credit:

Cash, Depreciation Expense, Prepaid Rent - CORRECT ANSWER Debit



The accounts increase with a debit or credit:

Sales Revenue, Deferred Revenue - CORRECT ANSWER Credit



True or False: Transactions are only recorded when there is an exchange of cash - CORRECT ANSWER
False: This is true for Cash Basis Accounting, but not for Accrual Accounting.



The income statement reflects a company's: - CORRECT ANSWER Financial performance over a given
period of time



What represents the net income/(loss) for the year? - CORRECT ANSWER The difference between the
revenues/gains and expenses/losses.



Income Statement:



Examples of Permanent Accounts - CORRECT ANSWER -CASH AND CASH EQUIVALENTS

-RENT PAYABLE

-INVENTORY



Income Statement:

, Examples of Temporary Accounts - CORRECT ANSWER -COST OF GOODS SOLD

-SALES REVENUE

-RENT EXPENSE



Nominal Accounts - CORRECT ANSWER Accounts that are reset to zero at the end of each accounting
period. Nominal accounts include all revenue and expense accounts, and may also be referred to as
temporary accounts or Income Statement accounts. The net balance of nominal accounts is transferred
to retained earnings at the end of each accounting period.



Real Accounts - CORRECT ANSWER Accounts which contain cumulative balances since the inception of
the business. The balances in these accounts flow from one accounting period to the next. Real accounts
include all asset, liability, and owners' equity accounts and may also be referred to as permanent
accounts or Balance Sheet accounts.



Balance Sheet - CORRECT ANSWER Financial report that shows the financial position of a company at a
specific point in time; a snapshot of the resources that are owned or controlled by company, and how
those resources were financed. The balance sheet shows the balance of all asset, liability, and equity
accounts as of a given date.



What type of account is 'mortgage payable'? - CORRECT ANSWER long term liability account



T-Account - CORRECT ANSWER A T-account shows all the activity for a given account for a specific period
of time, or in other words, the T-account is the summary of several journal entries.



How quickly and easily an item can be converted to cash is known as: - CORRECT ANSWER liquidity



The trial balance for a business at a given point in time typically has much more detailed information
than what is depicted on the financial statements. What is the accounting concept that allows for the
information from the trial balance to be condensed to what is displayed on the financial statements? -
CORRECT ANSWER Materiality



The concept of materiality states that a business is not required to report information on financial
statements that would not impact the decision-making of the users of the financial statements.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

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

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

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 ROSEGRADES. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for CA$19.53. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75323 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
CA$19.53
  • (0)
  Add to cart