ACC 101 Chapter 1 || with 100% Errorless Answers.
What iis accounting? correct answers An information and measurement system that identifies,
records, and communicates information about business information. Also known as the language
of business
3 parts of accounting correct answers Identifying: select transactions and events
Recording: input, measure, and log
Communicating: prepare, analyze, and interpret
Record/Bookkeeping correct answers most common with accounting, the recording part of acc.,
technology helps reduce time and effort and gives more accuracy (credit approvals, checking
accounts, tax forms, and payroll)
External Users correct answers Do not directly run the organization and have limited access to
the bus. info. Financial accountants are used for this. Ex. users: Lenders, shareholders, directors,
external auditors, labor unions, regulators, gov't, contributers, suppliers, consumers
Financial Accounting correct answers aimed at external users by providing them with general
purpose financial statements.
Internal Users correct answers Directly manage and operate the organization, CEO etc. uses
managerial accounting. Int. users: research and development managers, purchasing managers,
human resource managers, production managers, distribution/marketing/service managers
Managerial Accounting correct answers area that serves decision making needs of internal users.
internal reports are not subject to the same rules as external.
Four broad opportunities of accounting correct answers Financial, managerial, taxation, and
accounting related
Private Accounting correct answers employees working for businesses
Public Accounting correct answers services such as auditing and taxing
Certified special accountants correct answers CPA-certified public accountants: must meet
education and experience requirements, pass exam, and be ethical.
CMA-certificate in management accounting
CIA- certified internal auditor
CB- certified bookkeeper
CPP- certified payroll professional
CFE- certified fraud examiner
CrFa- certified forensic accountant
Accounting Salaries correct answers public- 60,000-240,000
private-58,000-290,000
, recordkeeping-39,000-60,000
Ethics correct answers Beliefs that distinguish right from wrong, accepted standards of good and
bad behavior, good ethics avoids regretting decisions. Good ethics are good business
Ethical Descision Making correct answers Identify ethical concern- use personal ethics
Analyze options- consider good and bad consequences
Make ethical decision- choose best option after weighing consequences
Fraud Triangle correct answers 3 factors have to exist to commit fraud:
Opportunity- commiting fraud with low risk of getting caught
Pressure- must feel pressure or incentive
Rationalization- justification without seeing it as criminal
Internal Controls correct answers procedures to protect company property and equipment, ensure
reliable accounting, promote efficiency, and follow procedures
Sarbanes-Oxley Act correct answers To prevent fraud, and curb financial abuses at companies
that sell stock. Requires documentation and verification of internal controls and their
effectiveness (by auditors). Failure to comply: stock market delisting, financial penalties, and
criminal prosecution.
Dodd-Frank Wall Street Reform and Consumer Protection Act correct answers To: promote
accountability, and transparency, put an end to "too big to fail", protect consumers from abusive
financial services.
Includes: Clawback-requires recovery of excess incentive compensation, and Whistleblower-
requires SEC to pay whistleblowers 10-30% on annything more than $1 mil.
GAAP correct answers Generally Accepted Accounting Principles-makes infromation relevant
(affects decisions), reliable (makes trusted by others), and comparable( helps contrast
organizations.
SEC correct answers Securities and Exchange Commission- gov't agency that sets up GAAP,
and oversees it from companies that make money from public by issuing stock and debt
FASB correct answers Financial Accounting Standards Board- private sector group that sets both
broad and specific principles, has been tasked with GAAP by the SEC
IASB correct answers International Accounting Standards Board- an independent group
consisting of many individuals from different countries.
IFRS correct answers International Financial Reporting Standards- issued by IASB, identify
preferred accounting practices. very similar to GAAP
FASB Conceptual Framework correct answers 1. Objectives of financial reporting (provide
useful info)
