MBUS 300 Final Exam Prep questions well

MBUS 300 Final Exam Prep questions
well 2025/2026

Accounting - CORRECT ANSWER ✔✔The information system that identifies, records, and
communicates the economic events of an organization to interested users.



Assets - CORRECT ANSWER ✔✔Resources a business owns.



Auditing - CORRECT ANSWER ✔✔The examination of financial statements by a certified public
accountant in order to express an opinion as to the fairness of presentation.



Balance sheet - CORRECT ANSWER ✔✔A financial statement that reports the assets, liabilities,
and owner's equity at a specific date.



Basic accounting equation - CORRECT ANSWER ✔✔Assets = Liabilities + Owner's equity.



Bookkeeping - CORRECT ANSWER ✔✔A part of the accounting process that involves only the
recording of economic events.



Convergence - CORRECT ANSWER ✔✔The process of reducing the differences between U.S.
GAAP and IFRS.



Drawings - CORRECT ANSWER ✔✔Withdrawal of cash or other assets from an unincorporated
business for the personal use of the owner(s).

,Economic entity assumption - CORRECT ANSWER ✔✔An assumption that requires that the
activities of the entity be kept separate and distinct from the activities of its owner and all other
economic entities.



Ethics - CORRECT ANSWER ✔✔The standards of conduct by which actions are judged as right or
wrong, honest or dishonest, fair or not fair.



Expanded accounting equation - CORRECT ANSWER ✔✔Assets = Liabilities + Owner's capital −
Owner's drawings + Revenues − Expenses



Expenses - CORRECT ANSWER ✔✔The cost of assets consumed or services used in the process
of generating revenue.



Fair value principle - CORRECT ANSWER ✔✔An accounting principle stating that assets and
liabilities should be reported at fair value (the price received to sell an asset or settle a liability).



Faithful representation - CORRECT ANSWER ✔✔Numbers and descriptions match what really
existed or happened—they are factual.



Financial accounting - CORRECT ANSWER ✔✔The field of accounting that provides economic
and financial information for investors, creditors, and other external users.



Financial Accounting Standards Board (FASB) - CORRECT ANSWER ✔✔A private organization
that establishes generally accepted accounting principles (GAAP) in the United States.



Forensic accounting - CORRECT ANSWER ✔✔An area of accounting that uses accounting,
auditing, and investigative skills to conduct investigations into theft and fraud.



Generally accepted accounting principles (GAAP) - CORRECT ANSWER ✔✔Common standards
that indicate how to report economic events.

,Historical cost principle - CORRECT ANSWER ✔✔An accounting principle that states that
companies should record assets at their cost.



Income statement - CORRECT ANSWER ✔✔A financial statement that presents the revenues
and expenses and resulting net income or net loss of a company for a specific period of time.



International Accounting Standards Board (IASB) - CORRECT ANSWER ✔✔An accounting
standard-setting body that issues standards adopted by many countries outside of the United
States.



International Financial Reporting Standards (IFRS) - CORRECT ANSWER ✔✔International
accounting standards set by the International Accounting Standards Board (IASB).



Investments by owner - CORRECT ANSWER ✔✔The assets an owner puts into the business.



Liabilities - CORRECT ANSWER ✔✔Creditor claims against total assets.



Management consulting - CORRECT ANSWER ✔✔An area of public accounting ranging from
development of accounting and computer systems to support services for marketing projects
and merger and acquisition activities.



Managerial accounting - CORRECT ANSWER ✔✔The field of accounting that provides internal
reports to help users make decisions about their companies.



Monetary unit assumption - CORRECT ANSWER ✔✔An assumption stating that companies
include in the accounting records only transaction data that can be expressed in terms of
money.

, Net income - CORRECT ANSWER ✔✔The amount by which revenues exceed expenses.



Net loss - CORRECT ANSWER ✔✔The amount by which expenses exceed revenues.



Owner's equity - CORRECT ANSWER ✔✔The ownership claim on total assets.



Owner's equity statement - CORRECT ANSWER ✔✔A financial statement that summarizes the
changes in owner's equity for a specific period of time.



Partnership - CORRECT ANSWER ✔✔A business owned by two or more persons associated as
partners.



Proprietorship - CORRECT ANSWER ✔✔A business owned by one person.



Public accounting - CORRECT ANSWER ✔✔An area of accounting in which the accountant offers
expert service to the general public.



Revenues - CORRECT ANSWER ✔✔The increases in assets or decreases in liabilities resulting
from the sale of goods or the performance of services in the normal course of business.



Securities and Exchange Commission (SEC) - CORRECT ANSWER ✔✔A governmental agency that
oversees U.S. financial markets and accounting standard-setting bodies.



Statement of cash flows - CORRECT ANSWER ✔✔A financial statement that summarizes
information about the cash inflows (receipts) and cash outflows (payments) for a specific period
of time.



Taxation - CORRECT ANSWER ✔✔An area of public accounting involving tax advice, tax planning,
preparing tax returns, and representing clients before governmental agencies.