MBUS 300 Final questions well
answered graded A+ 2025/2026
Four basic financial statements - ANS ✔✔balance sheet, statement of cash flows, income
statement, statement of owners equity
Assets = ____ + ____ - ANS ✔✔liabilities + stockholders equity
Current Liabilities are - ANS ✔✔Obligations expected to require use of current assets or
creation of other current liabilities
US Generally Accepted Accounting Principles (GAAP) - ANS ✔✔Extensive and specific, accepted
by virtually all stock exchanges across the globe
International Financial Reporting Stands (IFRS) - ANS ✔✔Used by non-US firms listed on US
security exchanges
Differences between GAAP and IFRS - ANS ✔✔Differences in terminology
Simpler, fewer, and more general rules, relying more on judgement
True and fair override
Greater reliance on fair market values to use assets and liabilities
Short Term Debts - Short-term notes - ANS ✔✔Arise from cash loans and are generally payable
to banks or loan companies.
Life is somewhere between 30 days and one year, the bank or loan company lends borrowing
company less cash than indicated on face of note
,Short Term Debts - Current maturities of long-term debts - ANS ✔✔Often retired through series
of periodic installments.
Installments are to be paid within time period that defines current assets, should be included on
balance sheet as current liabilities
Dividends Payable are - ANS ✔✔Liability created when board of directors of corporation
declares a dividend to be paid to shareholders
Unearned Revenues - ANS ✔✔Arise because cash is received from customers prior to rendering
of services or delivery of products
Income Tax Liability - ANS ✔✔Based on percentage of taxable income in accordance with rules
stated in Internal Revenue Code
Contingencies - ANS ✔✔Existing condition, situation, or set of circumstances involving
uncertainty to possible gain or loss to an enterprise that will ultimately be resolved when one or
more future events occurs or fails to occur
probable (contingency) - ANS ✔✔The future event or events are likely to occur and can be
reasonably estimated.
Accounting Disclosure: ACCRUE in accounting records
reasonably possible (contingency) - ANS ✔✔The chance of the future event or events occurring
is more than remote but less than likely.
Accounting Disclosure: Notes to financial statements
remote (contingency) - ANS ✔✔The chance of the future event or events occurring is unlikely.
, Accounting Disclosure: No disclosure
Warranties are - ANS ✔✔Accrued Loss Contingencies. Seller promises to remove deficiencies in
quantity, quality, or performance of product sold to buyer
How to finance a corporation? - ANS ✔✔Borrow, issue equity, and retained earnings (profitable
operations)
Stockholders directly elect - ANS ✔✔Board of Directors
Authorized Stock is - ANS ✔✔The maximum number of shares of stock that may be issued
according to corporation's charter
Outstanding Stock is - ANS ✔✔Stock currently held by stockholders.
Includes shares that are reacquired (treasury stock) are still authorized and issued, but not
outstanding
Common Stock are - ANS ✔✔Rights of Common Stockholders
Common Stock Rights include - ANS ✔✔Right to profit and receive dividends if they are
declared by BOD
Residual right to corporation's assets in case of liquidation
Right to exert control over management which includes right to vote in annual election of BOD
answered graded A+ 2025/2026
Four basic financial statements - ANS ✔✔balance sheet, statement of cash flows, income
statement, statement of owners equity
Assets = ____ + ____ - ANS ✔✔liabilities + stockholders equity
Current Liabilities are - ANS ✔✔Obligations expected to require use of current assets or
creation of other current liabilities
US Generally Accepted Accounting Principles (GAAP) - ANS ✔✔Extensive and specific, accepted
by virtually all stock exchanges across the globe
International Financial Reporting Stands (IFRS) - ANS ✔✔Used by non-US firms listed on US
security exchanges
Differences between GAAP and IFRS - ANS ✔✔Differences in terminology
Simpler, fewer, and more general rules, relying more on judgement
True and fair override
Greater reliance on fair market values to use assets and liabilities
Short Term Debts - Short-term notes - ANS ✔✔Arise from cash loans and are generally payable
to banks or loan companies.
Life is somewhere between 30 days and one year, the bank or loan company lends borrowing
company less cash than indicated on face of note
,Short Term Debts - Current maturities of long-term debts - ANS ✔✔Often retired through series
of periodic installments.
Installments are to be paid within time period that defines current assets, should be included on
balance sheet as current liabilities
Dividends Payable are - ANS ✔✔Liability created when board of directors of corporation
declares a dividend to be paid to shareholders
Unearned Revenues - ANS ✔✔Arise because cash is received from customers prior to rendering
of services or delivery of products
Income Tax Liability - ANS ✔✔Based on percentage of taxable income in accordance with rules
stated in Internal Revenue Code
Contingencies - ANS ✔✔Existing condition, situation, or set of circumstances involving
uncertainty to possible gain or loss to an enterprise that will ultimately be resolved when one or
more future events occurs or fails to occur
probable (contingency) - ANS ✔✔The future event or events are likely to occur and can be
reasonably estimated.
Accounting Disclosure: ACCRUE in accounting records
reasonably possible (contingency) - ANS ✔✔The chance of the future event or events occurring
is more than remote but less than likely.
Accounting Disclosure: Notes to financial statements
remote (contingency) - ANS ✔✔The chance of the future event or events occurring is unlikely.
, Accounting Disclosure: No disclosure
Warranties are - ANS ✔✔Accrued Loss Contingencies. Seller promises to remove deficiencies in
quantity, quality, or performance of product sold to buyer
How to finance a corporation? - ANS ✔✔Borrow, issue equity, and retained earnings (profitable
operations)
Stockholders directly elect - ANS ✔✔Board of Directors
Authorized Stock is - ANS ✔✔The maximum number of shares of stock that may be issued
according to corporation's charter
Outstanding Stock is - ANS ✔✔Stock currently held by stockholders.
Includes shares that are reacquired (treasury stock) are still authorized and issued, but not
outstanding
Common Stock are - ANS ✔✔Rights of Common Stockholders
Common Stock Rights include - ANS ✔✔Right to profit and receive dividends if they are
declared by BOD
Residual right to corporation's assets in case of liquidation
Right to exert control over management which includes right to vote in annual election of BOD
