Principle of Financial Accounting: Final Exam Questions & Answers
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Course
Principle of Financial Accounting
Institution
Principle Of Financial Accounting
Statement of Cash Flow - ANSWERSexplains why cash changed during a fiscal period. Flows from operating, investing and financing activities are shown
Paid In Captial - ANSWERSamount invested in the entity by stockholder
Accounts Recievable - ANSWERSan asset representing a claim against another...
Principle of Financial Accounting: Final
Exam Questions & Answers
Statement of Cash Flow - ANSWERSexplains why cash changed during a fiscal period.
Flows from operating, investing and financing activities are shown
Paid In Captial - ANSWERSamount invested in the entity by stockholder
Accounts Recievable - ANSWERSan asset representing a claim against another entity,
usually arising fro selling goods and services
Goodwill - ANSWERSnonamoritzable intangible asset arising from the purchase of a
business for more than the fair value of the net assets acquired
Amortization - ANSWERSprocess of spreading the cost of an intangible asset over its
useful life
Stockholders Equtiy - ANSWERSownership right of stockholders of the entity in the
assets that remain after deducting the liabilities
Retained Earnings - ANSWERScumulative net income that has not been distributed to
the stockholders of a corporation as dividends
Revenues - ANSWERSin flows of cash or increases in other assets or the settlement of
liabilities during a period, from delivering or producing goods
Balance Sheet - ANSWERSFinancial statement that is listing of the entity's assets,
liabilities, and stockholders equity
Assets=Liabilities+Stockholders Equity
Horizontal Model - ANSWERSrepresents the balance sheet and income statement
relationship
Prepaid Expenses - ANSWERSExpenses that have been paid in the current fiscal
period but will no be subtracted from revenues until a subsequent fiscal period when
benefits are received
Cash Equivalents - ANSWERSshort-term, highly liquid investments that can readily be
converted into cash with a minimal risk of price change due to interest rate movements.
Consolidation Financial Statement - ANSWERSstatements resulting from the
combination of parents and subsidiary company financial statements
Dividend Payout Ratio - ANSWERSratio of the annual dividend per share of common
stock to earnings per-share
Outstanding Stock - ANSWERSnumber of shares of a class of stock held by
stockholders
-under stockholders equity
Alternative Names of Balance Sheet - ANSWERSStatement of Operations
Statement of Financial Position
What term is used to describe where transactions are summarized and recorded? -
ANSWERSGeneral ledger
Journalizing and posting
An illustration
Differences in Stockholder Equity section of corporation and owners' equity of a
proprietorship or partnership - ANSWERSCorporation has several advantages over the
sole proprietorship and the partnership form of business. 4 major advantages
1. Limited Liability
2. Ease in which owners can sell their ownership interest
3. Continuity
4. Ease in raising money
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