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Accounting 101 || All Questions Answered Correctly. R221,55
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Accounting 101 || All Questions Answered Correctly.
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What is accounting? Know the definition. 1 correct answers the action or process of keeping financial accounts "language of business" information system Know the definitions of revenues and expenses 1 correct answers Revenue: inflows of assets resulting from the sale of goods and services; i...

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  • August 9, 2024
  • 14
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • what is accounting know the definition 1

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  • Accounting 101
  • Accounting 101

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Accounting 101 || All Questions Answered Correctly.
What is accounting? Know the definition.
1 correct answers the action or process of keeping financial accounts
"language of business"
information system

Know the definitions of revenues and expenses
1 correct answers Revenue: inflows of assets resulting from the sale of goods and services;
increase in retained earnings from delivering goods or services to customers or clients

Expenses: outflows of assets resulting from the sales of goods and services; decrease in retained
earnings that results from operations the cost of doing business; opposite of revenues

Know the internal and external users
1 correct answers Internal User: managerial accounting; manager or someone else inside a
company who has access to private, internal knowledge about the company and can use this
knowledge to make financial decisions about the business. I.E. managerial and cost accountants

External users: financial accounting; a person outside of an organization who does not directly
run its operations and uses financial or accounting information about that company to make
decisions. It's someone who doesn't manage or work for the company but uses its financial
information

who is responsible for GAAP (accounting principles)
1 correct answers FASB: financial account standards board

GAAP: professional frameworks for measurement and disclosure of financial information

Accounting Equation
1 correct answers ASSETS = LIABILITIES + SHAREHOLDER'S EQUITY

The International Accounting Standards Board is responsible for developing a single set of
worldwide accounting standards (IFRS)
1 correct answers sets global financial reporting standards

These standards will help companies to reduce accounting costs, make it easier to acquire foreign
companies, and facilitate comparisons between foreign companies.
1 correct answers

Know the primary objective of financial reporting
1 correct answers Provide information for decision makers outside the entity, such as investors,
creditors, government agencies and the public

What makes information relevant?
1 correct answers must be able to make a difference in a decision

, must be material and important enough

requires that the financial accounting information should be such that the users need it and it is
expected to affect their decision

Assets are recorded at historical/ original cost because it is objective and verifiable
1 correct answers historical cost: should be recorded at their actual cost, measured by the date of
purchase as the amount of the cash paid plus the dollar value of all non cash consideration also
given exchange

Financial information should be understandable to whom
1 correct answers those willing to spend the necessary time to understand it

Balance Sheet
1 correct answers Assets: cash, petty cash, temporary investments, accounts receivable,
inventory, supplies, prepaid insurance, land, land improvements, buildings, equipment, goodwill,
bonds issue costs, ect.

Liabilities
notes payable, accounts payable, salaries payable, wages payable, interest payable, other accrued
expenses payable, customers deposits, income taxes payable, warranty liability, lawsuits payable,
unearned revenues, bonds, ect.

Owner's (Stockholder's)
Equity
common stock, preferred stock, paid-in capital in excess of par value, paid-in capital from
treasury stock, retained earnings, accumulated other comprehensive income

1Income Statement- revenues minus expenses equal net income correct answers revenues minus
expenses equal net income

Net income=
1 correct answers revenues-expenses

Know the order of statement preparation
1 correct answers 1. income
2. statement of retained earnings
3. balance sheet
4. statement of cash flows

Define and know the account types
2 correct answers ASSETS
cash: money and any medium of exchange
-bank balance
-coins

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