Intermediate Accounting Exam 1 & 2 || With Questions & Answers (100% Accurate)
Intermediate Accounting Exam 1 & 2 || With Questions & Answers (100% Accurate)
The balance sheet, the income statement, the statement of cash flows, and the statement of owners' or stockholders' equity. - ANSWER - Wh...
, Intermediate Accounting Exam 1 & 2 ||
With Questions & Answers (100%
Accurate)
The balance sheet, the income statement, the statement of cash flows, and the
statement of owners' or stockholders' equity. - ANSWER - What are the four main
financial statements?
Accounting provides relevant, reliable, and timely information to managers,
investors, and creditors to allow resource allocation to the most efficient enterprises.
Accounting also provides measurements of efficiency and financial soundness. -
ANSWER - How does accounting assist in the efficient use of scarce resources?
Financial, managerial, tax, audit, accounting information systems. - ANSWER - What
are the main areas of accounting?
Investors and Creditors. - ANSWER - Who are the primary users of financial
statements?
Financial accounting is the process that prepares a firm's financial reports for use by
both internal and external parties and managerial accounting is the process of
identifying, measuring, analyzing, and communicating financial info needed by
management. - ANSWER - What is the difference between financial accounting and
managerial accounting?
Which of the following is not a step used to apply the core principle of revenue
recognition?
a.) determine the transaction price
b.) identify the performance obligations in the contract
c.) identify the contract with a customer
d.) ensure the sales price is fixed and determinable - ANSWER - d.) ensure the sales
price is fixed and determinable
The five steps used to apply the core principle of revenue recognition are: -
ANSWER - 1. identify the contract with a customer
2. identify the performance obligation in the contract
3. determine the transaction price
4. allocate the transaction price to each performance obligation
5. recognize revenue when each performance obligation is satisfied
Which of the following is not an indicator that control of a good has passed from the
seller to the buyer?
a. buyer has legal title
b. buyer has an unconditional obligation to pay
c. buyer has scheduled delivery
d. buyer has assumed the risk and rewards of ownership - ANSWER - c. buyer has
scheduled delivery
, Amounts readily
available to pay off debt
or to use in operations - ANSWER - Cash
Short-term, highly liquid
investments, readily
convertible to cash with little
risk of loss - ANSWER - cash equivalents
Have a maturity date no
longer than three months
from the date of purchase - ANSWER - cash equivalents
internal control exists to: - ANSWER - *encourage adherence to company policies
and procedures
*promote operational efficiency
*minimize errors and theft
*enhance the reliability and accuracy of accounting date
Sarbanes-Oxley Act (Section 404) requires: - ANSWER - A company to document its
internal controls and assess
their adequacy
• Auditors to express an opinion on management's
assessment
Committee of Sponsoring Organizations (COSO): Defines internal control as a
process designed to provide
reasonable assurance regarding the achievement of
objectives in the following: - ANSWER - - Effectiveness and efficiency of operations
- Reliability of financial reporting
- Compliance with applicable laws and regulations
internal control objectives for cash disbursements - ANSWER - to prevent
unauthorized payments
to ensure that disbursements are recorded properly
internal control important elements for cash disbursements - ANSWER - all
disbursements should be made by check
all expenditures should be authorized
checks should be signed only by authorized individuals
Cash that is restricted in some way and not available for
current use - ANSWER - restricted cash
An amount that compensates the bank for granting the
loan or extending the line of credit - ANSWER - compensating balances
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