ACC 200 Exam 1 Actual Questions And Correct Detailed Answer Guaranteed Pass.

accounting - correct answer the process of identifying, measuring and communicating economic information to permit informed judgements and decisions -the language of business basic accounting formula - correct answer assets=liabilities + stockholders equity stockholders equity - correct answer contributed capital + retained earnings -contributed capital: reported on balance sheet -common stock, contributed capital, RE, treasury stock retained earnings - correct answer revenues- expenses- dividends -reported on balance sheet and statement of RE historic cost principle - correct answer record initially the activities of a company at cost -assets should be recorded and reported at the cost paid to acquire them revenue recognition principle - correct answer revenue should be recorded when a resource has been earned matching principle - correct answer expenses should be recorded in the period resources are used to generate revenue conservatism principle - correct answer avoids overstating assets or income in the preparation of financial statements full disclosure principle - correct answer reveal any info that makes a difference to financial statement users economic entity assumption - correct answer financial activities of a business should be accounted for separately from the business's owners monetary unit assumption - correct answer organizations are to report their financial results and activities in monetary units time period assumption - correct answer divides the life of the organization into artificial time periods to report results over short periods of time going concern assumption (continuity) - correct answer the company for which we are accounting will continue its operations into the foreseeable future understandability - correct answer can be comprehended by someone with a reasonable knowledge of business and finance relevance - correct answer the capacity of accounting information to make a difference in decisions reliablity - correct answer the extent to which accounting information can be depended upon to represent what it is suppose to represent, both in description and numbers comparability - correct answer achieved when different companies use the same accounting methods -used to compare and contrast between companies consistency - correct answer application of the same accounting principle by a single company over time materiality - correct answer the threshold at which a financial item begins to affect decision making steps to get a financial statement - correct answer 1. income statement 2. statement of retained earnings 3. balance sheet 4. statement of cash flows income statement - correct answer states the company's revenues and expenses over a specific period of time revenues - expenses = net income/loss statement of retained earnings - correct answer reports the change in a company's retained earnings over a specific period of time retained earnings, beginning balance +/- net income/loss - dividends = ending retained earnings balance sheet - correct answer report's a company's assets, liabilities, & equity at a specific period of time assets = liabilities + equity statement of cash flows - correct answer reports company's sources and uses of cash over a specific period of time cash flows provided by Operating Activities +/- cash flows provided by Investing Activities +/- cash flows provided by Financing Activities = net increase/decrease in Cash revenue - correct answer an increase in resources resulting from the sale of goods or services -reported on income statement expense - correct answer a decrease in resources resulting from the sale of goods or services -reported on income statement