ACC 501 Final Exam Concept Practice Questions
with Complete Solutions
(Ch 1) What is accounting?
An information system that reports on the economic activities and financial condition of a
business or other organization
What other organizations outside of businesses use accounting?
Nonprofits and Governments
(Ch 1) What is accounting used for in society
It can be used to compile historical results of the business into reports and financial statements
that are reported to stakeholders
(Ch 1) What is a stakeholder?
A user of accounting information
(Ch 1) What groups make up common stakeholders?
Creditors & Investors
(Ch 1) What are investors?
They provide financial resources that are not obligated to be returned, in exchange for ownership
interests in the business
(Ch 1) What are creditors?
They lend financial resources to the business that are expected to be repaid with interest
, (Ch 1) What is Financial Accounting
It provides accounting information to external stakeholders
(Ch 1) What is managerial accounting?
It provides accounting information to internal stakeholders
(Ch 1) Who Governs Accounting in the US?
Generally Accepted Accounting Principles (GAAP) established by the Financial Accounting
Standards Board (FASB)
(Ch 1) Who governs accounting outside of the US?
International Financial Reporting Standards (IFRS) were established by the International
Accounting Standards Board (IASB)
(Ch 1-PP) Which of the following groups has the primary responsibility for establishing
generally accepted accounting principles for business entities in the United States?
Financial Accounting Standards Board
(Ch 1-PP) Which resource providers lend financial resources to a business with the
expectation of repayment with interest?
Creditors
(Ch 1-PP) Financial accounting standards are known collectively as GAAP. What does that
acronym stand for?
Generally Accepted Accounting Principles
with Complete Solutions
(Ch 1) What is accounting?
An information system that reports on the economic activities and financial condition of a
business or other organization
What other organizations outside of businesses use accounting?
Nonprofits and Governments
(Ch 1) What is accounting used for in society
It can be used to compile historical results of the business into reports and financial statements
that are reported to stakeholders
(Ch 1) What is a stakeholder?
A user of accounting information
(Ch 1) What groups make up common stakeholders?
Creditors & Investors
(Ch 1) What are investors?
They provide financial resources that are not obligated to be returned, in exchange for ownership
interests in the business
(Ch 1) What are creditors?
They lend financial resources to the business that are expected to be repaid with interest
, (Ch 1) What is Financial Accounting
It provides accounting information to external stakeholders
(Ch 1) What is managerial accounting?
It provides accounting information to internal stakeholders
(Ch 1) Who Governs Accounting in the US?
Generally Accepted Accounting Principles (GAAP) established by the Financial Accounting
Standards Board (FASB)
(Ch 1) Who governs accounting outside of the US?
International Financial Reporting Standards (IFRS) were established by the International
Accounting Standards Board (IASB)
(Ch 1-PP) Which of the following groups has the primary responsibility for establishing
generally accepted accounting principles for business entities in the United States?
Financial Accounting Standards Board
(Ch 1-PP) Which resource providers lend financial resources to a business with the
expectation of repayment with interest?
Creditors
(Ch 1-PP) Financial accounting standards are known collectively as GAAP. What does that
acronym stand for?
Generally Accepted Accounting Principles
