©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Intro To Financial Accounting Exam 1 Study
Guide.
Accounting consists of three basic activities - answer✔Identifies, records, communicates
Who uses Accounting Data - answer✔External Users: Creditors and Investors
Recent Financial Scandals - answer✔Enron, WorldCom, HealthSouth, AIG
Sarbanes-Oxley Act of (SOX). - answer✔Added new criminal charges for accounting scandals
Financial Statements - answer✔Balance Sheet
Income Statement
Statement of Stock Holder's Equity
Statement of Cash Flows
Note Disclosure
Generally Accepted Accounting Principles (GAAP) - answer✔Standards generally accepted and
universally practiced
Standard Setting Bodies - answer✔Financial Accounting Standards Board (FASB)
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
(SEC)
International Accounting Standards Board
(IASB)
Historical Cost Principle - answer✔dictates that companies record assets at their cost.
Fair Value Principle - answer✔states that assets and liabilities should be reported at a fair value
Monetary Unit Assumption - answer✔companies include in accounting records only transaction
data expressed in money.
Economic Entity Assumption - answer✔Requires that activities of the entity be kept separate and
distinct from activities of the owner
Combining activities of Kellogg and General Mills would violate? - answer✔Economic Entity
Assumption
Corporation - answer✔Ownership divided into shares of stock
Accounting Equation - answer✔Assets= Liabilities + Stockholder's Equity
Assets - answer✔Resources a business owns
Provide future service or benefits
Cash, Supplies, Equipment
12/3/2024 11:27AM
Intro To Financial Accounting Exam 1 Study
Guide.
Accounting consists of three basic activities - answer✔Identifies, records, communicates
Who uses Accounting Data - answer✔External Users: Creditors and Investors
Recent Financial Scandals - answer✔Enron, WorldCom, HealthSouth, AIG
Sarbanes-Oxley Act of (SOX). - answer✔Added new criminal charges for accounting scandals
Financial Statements - answer✔Balance Sheet
Income Statement
Statement of Stock Holder's Equity
Statement of Cash Flows
Note Disclosure
Generally Accepted Accounting Principles (GAAP) - answer✔Standards generally accepted and
universally practiced
Standard Setting Bodies - answer✔Financial Accounting Standards Board (FASB)
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
(SEC)
International Accounting Standards Board
(IASB)
Historical Cost Principle - answer✔dictates that companies record assets at their cost.
Fair Value Principle - answer✔states that assets and liabilities should be reported at a fair value
Monetary Unit Assumption - answer✔companies include in accounting records only transaction
data expressed in money.
Economic Entity Assumption - answer✔Requires that activities of the entity be kept separate and
distinct from activities of the owner
Combining activities of Kellogg and General Mills would violate? - answer✔Economic Entity
Assumption
Corporation - answer✔Ownership divided into shares of stock
Accounting Equation - answer✔Assets= Liabilities + Stockholder's Equity
Assets - answer✔Resources a business owns
Provide future service or benefits
Cash, Supplies, Equipment
