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ACCT 303 Chapter 1 exam with complete solutions 2024_2025
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ACCT 303 Chapter 1 exam with complete solutions 2024_2025
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ACCT 303 Chapter 1 exam with completesolutions 2024/2025
Accounting - ANSWER-The information systems that identifies, records, and
communicates the events of an organization to interested users
Annual Report - ANSWER-A report prepared by corporate management that
presents financial information including financial statements, a management
discussion and analysis section, notes, and an independent auditor's report
Assets - ANSWER-resources owned by a business
Auditor's Report - ANSWER-A report prepared by an independent outside auditor
stating the auditor's opinion as to the fairness of the presentation of the financial
position and results of operations and their conformance with generally accepted
accounting principles.
Balance Sheet - ANSWER-A financial statement that reports the assets and
claims to those assets at a specific point in time.
Basic Accounting Equation - ANSWER-Assets = Liabilities + Stockholders' Equity
Certified Public Accountant (CPA) - ANSWER-An individual who has met certain
criteria and is thus allowed to perform audits of corporations
Common Stock - ANSWER-Term used to describe the total amount paid in by
stockholders for the shares they purchase
Corporation - ANSWER-A business organized as a separate legal entity owned by
stockholders
, Dividends - ANSWER-payments of cash from a corporation to its stockholders
Expenses - ANSWER-The cost of assets consumed or services used in the
process of generating revenues.
Income Statement - ANSWER-A financial statement that reports a company's
revenues and expenses and resulting net income or net loss for a specific period
of time.
Liabilities - ANSWER-Amounts owed to creditors in the form of debts and other
obligations
Management discussion and analysis (MD&A) - ANSWER-A section of the annual
report that presents management's views on the company's ability to pay near-
term obligations, its ability to fund operations and expansion, and its results of
operations.
Net income - ANSWER-The amount by which revenues exceed expenses.
Net loss - ANSWER-The amount by which expenses exceed revenues.
Notes to the financial statements - ANSWER-Notes clarify information presented
in the financial statements and provide additional detail.
Partnership - ANSWER-a business owned by two or more persons associated as
partners
Retained Earnings - ANSWER-the amount of net income retained in the
corporation
Retained Earnings Statement - ANSWER-A financial statement that summarizes
the amounts and causes of changes in retained earnings for a specific time
period.
Revenue - ANSWER-the increase in assets or decrease in liabilities resulting from
the sale of goods or the performance of services in the normal course of
business
Sarbanes-Oxley Act (SOX) - ANSWER-Regulations passed by Congress to reduce
unethical corporate behavior.
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