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ACG 2021; Questions & Answers 100% Correct
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ACG 2021; Questions & Answers 100% Correct Financial Accounting CORRECT ANSWER-1. Measure business activity 2. Communicate measurements to people for decision making Primary external users of financial accounting info CORRECT ANSWER-Investors and creditors Financing Activities CORRECT ANSWER-...

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  • August 9, 2024
  • 16
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • acg 2021 questions answers 100 correct
  • financial accounting correct answer 1 measure bu

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  • ACG 2021
  • ACG 2021

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ACG 2021; Questions & Answers 100% Correct
Financial Accounting CORRECT ANSWER-1. Measure business activity

2. Communicate measurements to people for decision making




Primary external users of financial accounting info CORRECT ANSWER-Investors and
creditors




Financing Activities CORRECT ANSWER-Involves funding from external sources such as,
owners of company who invest their own funds into business and creditors who lend money to
the company




Investing Activities CORRECT ANSWER-Involves purchase and sale of long-term resources
such as, land, buildings, equipment, and machinery




Operating Activities CORRECT ANSWER-Involves transactions in primary operations of
business/ Providing products and services to customers and associated costs of doing so Ex.
utilities, wages, rent, maintenance




Accounting Equation CORRECT ANSWER-Assets=Liabilities+Stockholders' Equity/
Resources=Claims to resources




Accounting Equation used to CORRECT ANSWER-measure business transactions




Assets def CORRECT ANSWER-Resources owned by a company

, ACG 2021; Questions & Answers 100% Correct

Liabilities CORRECT ANSWER-Amounts owed to creditors




Stockholders' Equity CORRECT ANSWER-Stockholders' or owners' claims to resources




Corporation Pros CORRECT ANSWER-Limited liability: Only lose how much you invested/
Not obligated to pay corporation's debts




Corporation Cons CORRECT ANSWER-Double taxation:

1. @ corporate level (taxed more)

2. @ personal income tax when dividends are distributed (less of a tax)




CPA CORRECT ANSWER-Certified Public Accountant- serves general public




CMA CORRECT ANSWER-Certified Management Accountants- specialize in accounting
and financial management for private industries




Generally Accepted Accounting Principles (GAAP) CORRECT ANSWER-Rules of financial
accounting




Functions of GAAP CORRECT ANSWER-Allows comparison of financial info among
companies

, ACG 2021; Questions & Answers 100% Correct

Financial Accounting Standards Board (FASB) CORRECT ANSWER-Independent private
body that has primary responsibility for the establishment of GAAP in the U.S.




Functions of FASB CORRECT ANSWER-Creates rules and standards that govern financial
accounting/ Responsibility, but not authority, to set standards




SEC CORRECT ANSWER-Securities and Exchange Commission




Functions of SEC CORRECT ANSWER-Oversees US financial markets/ Requires companies
that publicly trade stock to prepare financial statements for investors and creditors




Auditors CORRECT ANSWER-Trained individual hired by a company as an independent
party to express professional opinion of accuracy of that company's financial statements/ Makes
sure financial statements are in accordance with GAAP/ Add credibility




Flow of Accounting CORRECT ANSWER-GAAP(rules) formulated by FASB -> Accounting
Equation: Assets=Liabilities+Stockholders' Equity -> Income Statement -> Statement of
Stockholders' Equity -> Balance Sheet -> Statement of Cash Flows




Cash CORRECT ANSWER-Liquid assets

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