Exam (elaborations)
ACC 241 Exam 1|171 Questions with Verified Answers,100% CORRECT
- Course
- Institution
ACC 241 Exam 1|171 Questions with Verified Answers
[Show more]
Content preview
ACC 241 Exam 1|171 Questions with Verified AnswersWhat is accounting? - CORRECT ANSWER Accounting consists of three basic
activities- it identifies, records, and communicates the economic events of an
organization to interested users.
Identifies - CORRECT ANSWER the economic events relevant to its business
Records - CORRECT ANSWER consists of keeping a systematic, chronological diary
of events, measured in dollars and cents
Communicates - CORRECT ANSWER the collected information to interested users
by means of accounting reports
Financial Statements - CORRECT ANSWER Four Parts:
1. An income statement presents the revenues and expenses and resulting net
income or net loss for a specific period of time.
2. An owner's equity statement summarizes the changes in owner's equity for a
specific period of time.
3. A balance sheet reports the assets, liabilities, and owner's equity at a specific
date.
4. A statement of cash flows summarizes information about the cash inflows
(receipts) and outflows (payments) for a specific period of time.
What is a vital element in communicating economic events? - CORRECT ANSWER
the accountant's ability to analyze and interpret the reported information
Analysis - CORRECT ANSWER involves use of ratios, percentages, graphs, and
charts to highlight significant financial trends and relationships
Interpretation - CORRECT ANSWER involves explaining the uses, meaning, and
limitations of reported data
,Summary of the Accounting Process - CORRECT ANSWER Identification (select
economic events -transactions)
Recording (record, classify, and summarize)
Communication (prepare accounting reports)
Analyze and interpret for users
Bookkeeping - CORRECT ANSWER involves only the recording of economic events
Who uses accounting data? - CORRECT ANSWER There are two broad groups of
users of financial information: internal users and external users.
Internal users - CORRECT ANSWER managers who plan, organize, and run the
business
-include marketing managers, production supervisors, finance directors, and
company officers
-managerial accounting
Managerial accounting - CORRECT ANSWER provides internal reports to help
users make decisions about their companies
External Users - CORRECT ANSWER individuals and organization outside a
company who want financial information about the company
What are the two most common types of external users? - CORRECT ANSWER
Investors and Creditors
Investors - CORRECT ANSWER (owners) use accounting information to make
decisions to buy, hold, or sell ownership shares of a company
Creditors - CORRECT ANSWER (suppliers and bankers) use accounting information
to evaluate the risks of granting credit or lending money
Financial accounting - CORRECT ANSWER provides economic and financial
information for investors, creditors, and other external users
Taxing authorities - CORRECT ANSWER want to know whether the company
complies with tax laws
, Regulatory agencies - CORRECT ANSWER want to know whether the company is
operating within prescribed rules
Customers - CORRECT ANSWER interested in whether a company will continue to
honor product warranties and support its product lines
Labor unions - CORRECT ANSWER want to know whether the owners have the
ability to pay increased wages and benefits
The Building Blocks of Accounting - CORRECT ANSWER
Ethics - CORRECT ANSWER standards of conduct by which one's actions are
judged as right or wrong, honest or dishonest, fair or not fair
Generally Accepted Accounting Principles (GAAP) - CORRECT ANSWER standards
that are generally accepted and universally practiced
-indicate how to report economic events
Financial Accounting Standards Board (FASB) - CORRECT ANSWER the primary
accounting standard-setting body in the United States
Securities and Exchange Commision (SEC) - CORRECT ANSWER the agency of the
U.S. government that oversees U.S. financial markets and accounting standard-
setting bodies
International Accounting Standards Board (IASB) - CORRECT ANSWER Many
countries outside of the United States have adopted the accounting standards
issued
Convergence - CORRECT ANSWER
Measurement Principles - CORRECT ANSWER 1. the cost principle
2. the fair value principle
What principle to follow? - CORRECT ANSWER generally relates to trade-offs
between relevance and faithful representation
The benefits of buying summaries with Stuvia:
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
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
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 paulhans. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
81849 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now